Under the proof-of-stake model, Ethereum holders have the opportunity to stake their tokens to earn rewards, with selection as validators depending on the amount staked.

While staked Ethereum shares some similarities with bonds, it is distinct in that it lacks fixed maturities and government backing, resulting in variable yields influenced by staking amounts and transaction volumes.

Staked Ethereum's yield can be affected by inflation, particularly if new issuance surpasses the burn rate, which can impact the net yield for holders.

Despite differing views on its comparison to traditional assets, Ethereum is regarded as a promising long-term investment due to its network utility and growth potential.

Cathie Wood, CEO of ARK Invest, posits that Ethereum is evolving in ways that could make it comparable to U.S. Treasury bills.

The ARK white paper introduces the idea of Ethereum as a 'crypto T-bill,' suggesting that this perception could enhance its market acceptance and growth.

In contrast, Bitcoin remains a finite asset with only 21 million tokens available for mining, of which 19.8 million are already in circulation, drawing parallels to gold.

Bitcoin's price reached a peak of over $108,000 in 2024, driven largely by its reputation as a hedge against inflation.

ARK Invest forecasts that Ethereum staking may emerge as a key benchmark in the cryptocurrency sector, potentially offering average yields around 4% for investors.

The transition of Ethereum from a proof-of-work to a proof-of-stake consensus mechanism in late 2022 was aimed at enhancing efficiency and reducing energy consumption.