Merlin ($MERL) is in the news as there is a sudden increase in the amount of on-chain staking within the ecosystem. On-chain statistics provided by Lookonchain indicate that the aggregate staking volume has now grown to 232 million $MERL, representing 71.5 million in dollar value at the present market price.Â
This number represents 23.7 percent of the supply in circulation and this represents a great investor migration into staking, and away from holding tokens in exchanges.
The staking growth is also an indicator of the rising trust in the Merlin ecosystem by the community, and investors focus on the long-term returns and joining the network. The trend also indicates that liquidity will be reduced in the short run, potentially affecting the market of $MERL in centralized exchanges (CEXs).
Declining Exchange Balances
Currently, 91.84 million of $MERL, at a value of 28.3 million, is still outstanding on CEXs. The decline in exchange balances implies lower selling pressure because more tokens are shifting to staking contracts. A decrease in supply in the exchanges usually leads to price stability or even rise in the price, depending on the trends.
The trend is that holders are more interested in getting passive income and getting involved in the staking mechanism of Merlin instead of trading on the ups and downs of the price in the short term.
$MERL On-Chain Activity Highlights
According to the latest transactions information, there have been a continuous steady inflow of staking. And within the last week alone several wallets transferred small sums, amounting to 50,000 + 12,638 + +2,162 + in their individual transfers. These inflows point to regular involvement of small and large holders.
Market Implications
Approximately a quarter of circulating $MERL is staked and this presents a tightening supply situation in the market. Traditionally, when demand is steady or growing, such conditions have contributed to better price performance. Meanwhile, decreased exchange availability can restrain short-term trader liquidity.
Such a balance between staking involvement and market liquidity will play a key role in the alignment of the path of $MERL over the next few months. The question that investors and analysts will be keenly monitoring is whether the momentum in stake-holding will continue and what effect it will have on the general market performance.
The Road Ahead
The increasing staking activity by Merlin is the proof of the increasing trust of the investors and the growing ecosystem of the project.
Once staking volumes are more than exchange balances, then the volatility of $MERL will decrease and potentially higher price floors. This will, however, be dependent on further adoption and new demand whether it will be in line with the tendency of locked supply.
To date, the information is pointing to a population that will invest its tokens into long-term development, and staking is at the heart of the emerging story of $MERL.
