@guymill
A high staking ratio can dampen volatility by reducing circulating supply and increasing the cost of liquidity for selling. When a large percentage of tokens are locked in staking, sudden sell pressure is harder to materialize, supporting price stability. However, this effect depends on unstaking periods—short or instant withdrawals weaken the stabilizing effect. Additionally, high staking ratios can concentrate governance power, potentially impacting investor sentiment. If staking yields are attractive and perceived as sustainable, they encourage long-term holding, further reducing volatility. But in extreme cases, high staking can also amplify downside risk if a sudden shift in sentiment triggers mass unstaking. Overall, high staking ratios generally correlate with lower short-term volatility but must be supported by sound tokenomics and protocol trust.
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