3 Ways Bybit's $1.5 Billion Hack Will Impact the Staking Industry
The recent hack of Bybit, the largest in crypto history, has sent shockwaves throughout the industry. The attack, reportedly carried out by North Korea's Lazarus Group, resulted in the theft of over 401,000 ETH, a staggering $1.5 billion in losses at an average price of $2,600 per ETH. This breach highlights the risks associated with staking on centralized platforms and may drive users to adopt decentralized alternatives.
According to Bohdan Opryshko, Chief Operating Officer of Everstake, the hack could further encourage users to stake on decentralized platforms. The event resulted in the loss of roughly 16,000 ETH in potential yearly staking rewards. This significant blow will impact retail investors who may lack the financial resilience to absorb such losses.
Declining Staking Share on Centralized Exchanges
The Bybit hack may be a turning point for the crypto industry, highlighting the risks of staking on centralized platforms. Recent data shows a decline in the amount of staked ETH on centralized exchanges. In the last six months, the amount of staked ETH has dropped from 8,597,984 ETH in September 2024 to 8,024,288 ETH in February 2025, representing a 6.67% decline.
Following the hack, staked ETH on CEXs fell by 0.56%, while on-chain staking (excluding CEXs) increased by 0.31%. This suggests a shift in the staking landscape, with users increasingly moving their assets away from centralized exchanges to more secure, non-custodial staking solutions or hardware wallets.
Long-term Implications and Industry Changes
The decline of centralized exchanges may see their influence wane as stakers migrate to decentralized alternatives. This change could have long-term implications for the crypto market. Centralized exchanges, which have long dominated the staking ecosystem, may lose their roles in governance, reward distribution, and network upgrades.
Institutional investors may become more cautious about entering the crypto market due to high-profile hacks like Bybit's. This stagnation could push back the timeline for achieving new price highs and delaying broader adoption. However, securing assets through non-custodial wallets and decentralized platforms can significantly mitigate the risks posed by centralized exchanges.
Collaboration and Security Measures
The entire crypto community needs to come together to balance innovation with security. This collaboration is essential for the long-term viability of the industry. Exchanges need to work to rebuild trust by enhancing their security measures, conducting regular audits, and offering insurance schemes for users affected by breaches.
Strengthening the overall security infrastructure can create an environment where both retail and institutional participants can confidently engage with the crypto market. Bybit's response is critical in re-establishing a 1:1 asset backing for its clients and closing the “ether gap.” This temporary situation may drive staking participants toward self-custody, keeping only the bare minimum on exchanges for transactions.
At the same time, securing assets through non-custodial wallets and decentralized platforms can significantly mitigate the risks posed by centralized exchanges. ByBit's $1.5 billion hack has put the entire industry on high alert, but it also presents an opportunity for growth and innovation in the staking space.
The Future of Staking
The full fallout of this breach is still unfolding, but it may serve as a catalyst for both retail and institutional staking participants to rethink their strategies. The Ethereum staking yield — hovering around 4% annually — means a loss of roughly 16,000 ETH in yearly staking rewards. This significant blow will impact retail investors who may lack the financial resilience to absorb such losses.
As the industry continues to evolve, it's crucial for both retail and institutional investors to embrace audited and certified self-custody solutions. Securing assets through non-custodial wallets and decentralized platforms can significantly mitigate the risks posed by centralized exchanges. By strengthening the overall security infrastructure, we can create an environment where both retail and institutional participants can confidently engage with the crypto market.
The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates. Bohdan Opryshko is the co-founder and Chief Operating Officer of Everstake, a global staking provider and blockchain solutions company founded in 2018. With a decade of industry experience, he and his team are committed to making financial empowerment through staking accessible to everyone.