Interest in staking ether (ETH), or locking coins in the Ethereum network to earn passive yield, has surged since Ethereum implemented the Shapella or Shanghai upgrade on April 12.

Data tracked by Glassnode show more than 4.4 million coins have been deposited into the staking contract since April 12, taking the tally to 22.58 million.

"The surge in demand for staking probably originates from large Ether holders, who prefer not to liquidate their holdings and instead seek to generate passive income," analysts at Bitfinex said in a weekly report shared with CoinDesk Tuesday.

"This trend is anticipated to persist, particularly considering that deflationary forces are expected to propel the price of Ether significantly," analysts added.

The staking demand has surged despite a waiting time of over one month, as previously reported. As of Tuesday, ether holders looking to become a validator on the network would have to wait for 36 days, according to data source wenmerge.com.

Currently, more than 50,000 perspective validators are in the queue. At press time, staking ether offers an annualized yield of 4% to 5%.

Validators are entities tasked with processing transactions and storing data on the blockchain and need to deposit at least 32 ETH.

Ether owners continue to establish themselves as network validators, enticed by an annual yield of around 4-5 percent through token staking.

Staking, as a way of passive investing, began gathering traction after Ethereum's Beacon Chain went live in December 2020. But for three years, stakers were unable to withdraw locked coins at will, which exposed them to ether price gyrations.

The Shapella upgrade de-risked staking, allowing users to unlock their coins at will.

The recently enabled withdrawal flexibility in ETH staking, courtesy of the Shapella upgrade, mitigates its perceived risk for many investors," Bitfinex's analysts noted. "Prior to this upgrade, potential stakeholders may have been deterred from staking their ETH tokens due to concerns about their funds being locked for an unacceptably long duration."

The increased demand for staking has yet to translate into a sustained ether bull run. The cryptocurrency rose by 11.5% to $2,140 in four days following the Shapella upgrade but has since retreated to trade at $1,850 at press time.