Ethereum: Unlocking $28 Billion Worth of Staked ETH
In a few weeks, Ethereum's Shanghai upgrade will start the process of unlocking $28 billion worth of staked ether (ETH) that has been unavailable for withdrawal and sale.
This slow process will affect Ethereum’s price as the supply is reintroduced to public markets.
According to Ethereum’s official website, the Shanghai upgrade is expected to launch in the first half of 2023, although some experts believe it could be as early as April 15th.
Since late 2020, staking ETH into Ethereum’s Beacon Chain has not allowed withdrawals. Ethereum has promised a variable 3-12% annualized yield for stakers as compensation for their commitment to not sell.
Investors may be worried about the impact of ETH withdrawals on the market, but the Shanghai upgrade includes rules to limit the amount of staked ETH that can be withdrawn at once.
Full withdrawals will take over 18 months to complete, with approximately 1,800 validators allowed to make a full withdrawal each day.
Partial withdrawals, which are larger than full withdrawals, will accommodate immediate requests from major players such as Kraken, Lido, and Coinbase.
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Ethereum developers have made withdrawing difficult, and validators must manually update their credentials and set their withdrawal addresses.
Overall, the Shanghai upgrade will allow for withdrawals of staked ETH but limits the amount available for withdrawal.
Less than 60,000 ETH will be eligible for daily withdrawal, preventing a massive sell-off of the 17.5 million staked ETH all at once.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
