ETH staking: where the yield comes from and why it is melting

ETH staking yield is made of three streams, each with its own nature.

Three sources

• Consensus emission. The protocol pays validators in new ETH. Importantly, total emission grows more slowly than the validator count - so the more is staked, the lower each participant's rate. This is a built-in balancer, not a temporary promotion.
• Priority fees (tips). Users' surcharge for faster inclusion in a block. Depends on network activity: quiet - pennies, frenzy - spikes.
• MEV. Income from transaction ordering (arbitrage, sandwiches) that builders hand to validators for the right to assemble the block. The most volatile part: on wild days MEV can double the yield.

Practical consequences

The staking rate floats and falls by construction: a growing share of staked ETH dilutes the emission component, while the fee component depends on L1 usage, which moved to the L2s. Liquid staking (LSTs) adds convenience and middle-layer risks - the smart contract, a depeg, provider centralization. Complex yield "boosters" on top of staking are different risks for the same percents: a breakdown - in the staking section.