Ethereum’s Shanghai hard fork, or “Shapella,” is now complete, allowing staked ether (ETH) withdrawals for users who secure and validate blockchain transactions. It seems that Ethereum’s recent Shapella upgrade has had a positive impact on the network’s pending withdrawals and the price of ether.
What Were Investors Expecting From the Update?
The main feature of the Shapella update was to enable Ethereum’s “staking” process by allowing stakers to withdraw their ETH from deposit contracts. However, it also included a few minor changes to the Ethereum software.
This update, which also aims to reduce transaction costs for certain activities, could also reduce the cost of gas fees. With the activation of the update, investors were allowed to withdraw their stake deposits for the first time since Ethereum staking began in 2020.
In the markets, it was also expected that these users would sell their Ethereum by unlocking their tokens. The cost of Ethereum for users who purchased their tokens before staking is lower than the current market prices, meaning that there are more people who bought at higher prices. This was increasing the thought of people selling their Ethereum to take profits, contrary to the positive sentiment in global markets. Despite large withdrawals from Ethereum, the price is moving upwards, contrary to expectations.
3.10 Billion Dollars Worth of Ether is Expected to be Withdrawn
According to token.unlocks, there is currently $3.10 billion worth of ether pending withdrawal, with an estimated $1.07 billion worth of ether available to users daily. Additionally, it is expected that 257,340 ether ($536.95 million) will be withdrawn over the next 11 hours.
Despite the fact that some analysts and short sellers expected the price of ether to fall following the upgrade, it has risen and is now trading slightly around $2100. It will be fascinating to observe how the network performs in the following weeks and months, and whether the pattern of increased withdrawals and costs continues.
Also, Kraken, a centralized exchange, is currently leading with the largest withdrawal of staked ether, totaling over 551,000 ETH (worth over $1 billion).
Staking Status Update: How Much Ether is Currently Being Staked After Ethereum’s Shanghai Upgrade?
Apart from prizes, 17.23 million ether ($35.95 billion), or 15.34% of the entire supply, remains staked. Yesterday’s net staking balance was around -103,600 ETH (-$204.04 million), with 201,840 ether withdrawn and 98,240 ether deposited.
The net staking balance after the Shanghai hard fork is -112,110 ETH (-$228.72 million), with 325,900 coins withdrawn and 213,790 coins deposited.
The withdrawal of staked ether was not intended to be this delayed, according to Grayscale’s Matt Maximo and Michael Zhao.
“Although withdrawals might continue to grow in the near term, withdrawals do not necessarily signal to sell, as users could be rotating validators or switching to staking providers that offer higher yields,”Analysis from Matt Maximo and Michael Zhao.
Vitalik Buterin Highlights Ethereum’s Next Challenge: Scaling
In an earlier live stream, Ethereum co-founder Vitalik Buterin stated that the most difficult and time-consuming parts of Ethereum’s protocol shift are virtually complete. While major duties remain, they may be completed at a more reasonable pace.
“We’ve reached the point where the most difficult and rapid parts of the Ethereum protocol’s transition are essentially complete. There are still important tasks that must be done, but they may be done safely at a slower pace.”Vitalik Buterin, Russian-Canadian computer programmer and the founder of Ethereum.
Buterin underlined that scaling – boosting transaction speed and lowering costs – is Ethereum’s next challenge following the Shanghai hard fork. He cautioned that if scalability is not addressed before the next bull run, customers may be forced to pay $500 per transaction. In comparison, failing to deploy Verkle Trees by the next bull run would be less of a problem, suggesting that the priority must be improving Ethereum’s scalability.
In summary, Ethereum’s recent volatility and its influence on the market are evident. Furthermore, Vitalik has indicated that significant progress has been made, and it’s expected many more innovations on the Ethereum front. With the increased market activity and Ethereum surpassing $2,000, many people believe this is a “bullish signal.”