Ethereum staking volume surpasses withdrawal volume post-Shapella upgrade

The Ethereum blockchain underwent a critical Shapella upgrade on April 12, marking a milestone in the history of the blockchain. The upgrade enabled validators to withdraw their staked Ether (ETH) from the Beacon Chain after three years, opening up the possibility of mass selling. However, the latest data suggests that most validators are choosing to restake their unlocked Ether, contributing to an increase in staked ETH volume.

According to the on-chain analytics firm Nansen, as of April 17, the ETH staking volume of 124,000 ETH exceeded the withdrawal volume of 64,800 ETH for the first time since the Shapella upgrade. In the last 24 hours, the amount of staked ETH was 94,968 against 27,076 in withdrawals. Notably, the first round of withdrawals primarily consisted of partial withdrawals from Lido and old validators, and it takes approximately three days to get into the withdrawal queue.

The Shapella upgrade was a make-or-break situation for the Ethereum blockchain, with millions in unlocked ETH posing a risk of mass selling. However, the data shows that the majority of validators are choosing to restake their unlocked Ether. Crypto exchange Binance is set to open withdrawals on April 19, which could lead to further changes in staked and withdrawal volumes.

Out of the 1 million withdrawn ETH, three addresses restaked a total of 19,844 ETH, suggesting that validators are actively choosing to remain invested in the blockchain. Three addresses transferred ETH to centralized exchanges (CEXs) after withdrawal, with 71,444 ETH sent to different exchanges. Other whales did the same, with some sending it to Huobi staking addresses and a few others to CEXs, according to data shared by Lookonchain.

While some validators, like Kraken, had to exit to comply with a United States Securities and Exchange Commission ruling, the majority of early withdrawals are staking rewards. Currently, 22,231 validators have signed up for a complete exit out of 574,624, while 910,930 ETH of the 18.6 million staked ETH is slated to be withdrawn.

One of the reasons for the decrease in withdrawals could be attributed to the current price of ETH. The average price of staked ETH is about $2,137, which suggests that validators are choosing to hold their assets rather than selling them at current prices.

In conclusion, the Shapella upgrade has been a success for the Ethereum blockchain, with the majority of validators choosing to remain invested in the platform. While some early withdrawals were staking rewards, the majority of validators are restaking their unlocked Ether, which has contributed to an increase in staked ETH volume. As the situation continues to evolve, it will be interesting to see how the balance between staked and withdrawn ETH evolves over time.


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Shapella Upgrade, Privacy Concerns, Hacks, and Financial Inclusion

The DeFi space had a busy week with several significant developments. The highly anticipated Shapella upgrade on Ethereum’s mainnet was successfully completed, allowing validators to withdraw their staked Ether after three years. However, only 253 validators have signed up to fully exit their staked Ether position, with analytics firm Glassnode predicting that less than 1% of the staked ETH will be withdrawn.

In addition to the Shapella upgrade, an Ethereum researcher revealed that staking Ether could become a privacy concern. The researcher found that staking Ether shows a user’s IP address information, which could lead to privacy issues. This discovery raised concerns within the cryptocurrency community.

A DeFi hack also occurred during the week, where a hacker exploited an old contract and minted 1 quadrillion Yearn Tether (yUSDT). The hacker then swapped the yUSDT to other stablecoins, allowing them to take hold of $11.6 million worth of stablecoins.

However, the week also had positive news regarding financial inclusion in Africa. Fonbnk, a Web3 on-ramp that allows Africans to obtain cryptocurrency assets by exchanging their airtime credits, partnered with Tanda, a merchant network platform in East Africa, to launch an airtime trading marketplace across Tanda’s network of agents. This partnership aims to increase liquidity and earning opportunities for African micro-entrepreneurs.

Finally, the top 100 DeFi tokens had a bullish week, thanks to a late surge in the crypto market after Ethereum’s much-awaited upgrade. Most DeFi tokens traded in the green along with the rest of the market.

In conclusion, the DeFi space had a busy week with several significant developments, including the successful Shapella upgrade, privacy concerns related to staking, a major DeFi hack, and a partnership to increase financial inclusion in Africa. The top 100 DeFi tokens had a bullish week, and Glassnode predicted only a small percentage of staked ETH would be withdrawn.


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Ethereum’s Shapella Upgrade Complete

The Ethereum mainnet has completed its Shapella upgrade, allowing validators to finally withdraw their staked Ether on the Beacon chain. This successful execution is a significant step for Ethereum, as it enables validators to access their staked funds and provides an opportunity for ETH holders to move assets into Ethereum staking pools.

At the time of writing, a total of 126,955.07 ETH had been withdrawn by validators. Of the 559,549 active validators, about 44% of them, or 248,043 validators, have the ability to request a partial or full withdrawal. The majority of withdrawals currently vary between 2.8-3.2 ETH, indicating that most validators are only withdrawing their staking rewards.

The average price of staked ETH is $3,149, which could be a reason why validators are not withdrawing the whole amount. Additionally, the ETH price is currently trading just under $2,000, with the price acting as a key resistance. However, major crypto exchanges have announced their support for ETH unstaking, with several already processing withdrawal requests.

Coinbase, the world’s first publicly listed crypto exchange, has announced that ETH unstaking is now live on their platform. BitGo’s Chief Operating Officer Chen Fang also took to Twitter to announce that the exchange has successfully upgraded to Shapella, and ETH withdrawals are now live on the platform.

Kraken, on the other hand, began withdrawing validators for their United States customers on April 11th and began processing withdrawals of ETH after the completion of the Shapella upgrade. This early withdrawal of validators by the exchange was caused by the U.S. Securities and Exchange Commission action brought against Kraken’s Ethereum staking product back in February.

Binance, the leading crypto exchange by trading volume, has announced its support for the Shapella upgrade and will begin processing withdrawal requests starting from April 19th. The exchange has also added that the withdrawal request can take up to 15 days to process due to processing limitations.

Bitfinex, one of the leading crypto exchanges, congratulated the Ethereum community on the successful upgrade and announced that the ETH withdrawal details would be shared soon.

This unlocking event may create conditions for an exodus from the staking protocol, but the ability to freely stake and unstake in accordance with bonding periods specified by the protocol could equally attract many ETH holders. The move to unstaking could see a massive movement of assets into Ethereum staking pools.

Overall, the successful completion of the Shapella upgrade is a significant milestone for Ethereum, as it provides validators and ETH holders the opportunity to access their staked funds and move assets into Ethereum staking pools. With major exchanges supporting ETH unstaking and processing withdrawal requests, it will be interesting to see how many ETH holders take advantage of this opportunity in the coming days and weeks.


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Coinbase warns of delays for ETH unstaking after Ethereum Merge

Coinbase has warned its users that unstaking requests for ETH on its platform may take weeks or even months to process after the upcoming Ethereum network update in mid-April. The Shapella upgrade will enable stakers to withdraw their ETH holdings after they were locked up during the Ethereum Merge event in September 2022, which transitioned the network from proof-of-work (PoW) to proof-of-stake (PoS).

Coinbase anticipates a flood of unstaking requests once the functionality is enabled, but as a channel to pass unstaked ETH to customers once released by the protocol, it has no control over the on-chain processing of requests. Unstaking requests will open to all Coinbase customers at the same time and be queued based on when they are received.

While Coinbase cannot give an exact timeframe for unstaking, it expects considerable wait times due to the time it takes for the Ethereum network to process transactions. In the meantime, Coinbase provides a liquid staking option called “cbETH,” which lets stakers trade ETH while it is still locked up, with the promise of redeemability at a later date.

The Ethereum Merge was a significant milestone for the network’s scalability, transitioning from PoW to PoS to reduce energy consumption and improve transaction processing times. While the Ethereum network remains the leading platform for decentralized applications and smart contracts, ETH stakers have been unable to access their holdings since the Merge. The upcoming Shapella upgrade will finally provide a solution, allowing users to withdraw their staked ETH and stake more without being subject to an indefinite lockup period.

Overall, Coinbase’s warning of potential delays in unstaking ETH highlights the complexities and limitations of on-chain processing. While the Ethereum network continues to evolve and improve, users must be patient and consider alternative options like Coinbase’s cbETH to mitigate the inconvenience of locked-up assets.


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