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With the imminent Shapella fork, Ethereum is about to complete its move to proof of stake. This will allow validators to withdraw ETH that has been staked.
The Shanghai upgrade, also known as the Shapella hard fork, is scheduled to occur on April 12 or within the next two days. The upgrade is anticipated to take place on April 12 at approximately 10:27 p.m. (UTC) at epoch 194,048. Data from Etherscan shows that more than 18.1 million ETH (18,131,991) worth $33,700,844,064 have been staked on the network since Beacon Chain went live in December 2020.
Withdrawals of staked ETH have to wait to be processed to prevent an exodus and worse security for Ethereum after the Shapella upgrade.
Lido, which holds about 31% of all staked ETH, will not allow its users who hold staked ETH (stETH) to redeem ETH initially, adding two weeks as a "safety margin." Coinbase, on the other hand, says withdrawal requests will be available 24 hours after the upgrade.
Withdrawals of staked ETH have to wait to be processed to mitigate an exodus and worse security for Ethereum. Partial withdrawals would take 4-5 days, while it's projected to take ~100 days for 1/3 of full withdrawals to happen, translating into $80M-$100M of $ETH being… https://t.co/4mV4JDXk3t
— IntoTheBlock (@intotheblock) April 10, 2023
Whichever way it goes, recent analysis provided by IntoTheBlock indicates partial withdrawals would take four to five days, while it is projected to take over 100 days for a third of full withdrawals to happen. This translates into $80 million to $100 million of ETH being withdrawn each day.
Danny, formerly of the Fantom Foundation and a DeFi analyst, opines that Ethereum might see an estimated amount of 50,400 ETH worth $95.7 million withdrawable per day. So far, stakers have earned about a million ETH in rewards and will have access to these.
How will ETH price react
Technically, the ETH price is at a crucial point, according to Danny, as it has failed to surpass the $2,000 psychological resistance in its recent climb, with analysts forecasting a fall.
With 18 million ETH unlocked after the Shapella upgrade, there may be short-term selling pressure. He adds that with most unlocks, there is usually a "brief pump," which might take out leveraged shorts before the dump.
Tomiwabold OlajideHe does, however, think that once stakers return and new ones join, the price will swiftly recover. He predicts either an increase in ETH staked, which might be bullish, or an increase in ETH-staked withdrawals, which would be bearish, as the two possible effects of the Shapella upgrade.
Arman Shirinyan
Alex Dovbnya
Vladislav Sopov
Dan Burgin