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Ethereum’s Shapella: Only 0,6% of ETH validators chose to withdraw, no price drop to come – Report

John KumiBy 0Edited by John Kiguru 12. April 20233 Mins Read
  • The Shapella upgrade is set to be launched, but only a few validators are planning to withdraw. 
  • Ethereum has performed poorly compared to Bitcoin ahead of the upgrade. 

Shapella upgrade, scheduled for April 12, 2023, is said to be a follow-up of the famous Ethereum Merge that transitioned the network from the Proof of Work to the Proof of Stake algorithm. Shapella is said to combine the Shanghai and Capella validator changes. With Shanghai upgrading the network’s execution clients and Capella focusing on the consensus layer or consensus clients, both will occur simultaneously. The purpose of the Shapella upgrade is to enable staking validators to withdraw their funds for the first time. 

As of the time of writing, $34 billion or 18.14 million ether is locked in the Beacon chain contract. This is about 15 percent of all Ethereum in circulation  The withdrawal of the funds will be subjected to specific thresholds built into the rules. According to reports, some validators would have to submit their wallet addresses for full withdrawals. Those with excess funds earned from staking and validating, and have valid addresses would be subjected to partial withdrawal. Those who qualify for full withdrawal can remove their entire 32 ETH required to stake and exit the validator system. 

After a smooth Goerli transition, client teams have scheduled the Shapella upgrade for mainnet activation. The consensus was quickly reached on an April 12th date during the 157th All Core Devs Execution Layer meeting. This upgrade follows The Merge and enables validators to withdraw their stake from the Beacon chain back to the execution layer. It also introduces new functionality to both the execution and consensus layer.

Few validators willing to withdraw after the Shapella upgrade

Interestingly, data from IntoTheBlock shows that 0.6 percent of Ethereum validators are planning to withdraw their funds after the fork. As of April 10, just 3,614 out of 562,717 Ethereum validators had decided to withdraw their stake. 

Unlocking this for withdrawal is expected to cause a market dump from investors. Coinbase predicted that there will be a high volume of withdrawal requests after the upgrade. According to them, this could take weeks or months to process. 

Unstaking requests will open to all Coinbase customers at the same time and will be relayed to the Ethereum protocol and queued based on when they are received…Customers may need to remain patient. We anticipate the Ethereum protocol will take weeks to months to process unstaking requests immediately following the upgrade.

Research from analysts at Kaiko has stated that Ethereum has performed poorly compared to Bitcoin ahead of the Shapella upgrade. 

Ethereum’s spot volumes have struggled to maintain pace with bitcoin’s, with Ethereum’s market share of USD volume recently hitting its lowest levels since March 2021.

Ethereum is down by 2 percent in the last 7 days, and also down by 2 percent in the last 24 hours. With a current bullish sentiment, Ethereum is trading at $1,894.10. Bitcoin is also up by 6.9 percent in the last seven days and trading at $30,364.29. 

 

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This article is provided for informational purposes only and is not intended as investment advice. The content does not constitute a recommendation to buy, sell, or hold any securities or financial instruments. Readers should conduct their own research and consult with financial advisors before making investment decisions. The information presented may not be current and could become outdated.

John is a seasoned cryptocurrency and blockchain writer and researcher, boasting an extensive track record of years immersed in the ever-evolving digital frontier. With a profound interest in the dynamic landscape of emerging startups, tokens, and the intricate interplay of demand and supply within the crypto realm, John brings a wealth of knowledge to the table. His academic background is marked by a Bachelor's degree in Geography and Economics, a unique blend that has equipped him with a multifaceted perspective. This diverse educational foundation allows John to dissect the geographical and economic factors influencing the cryptocurrency market, offering insights that go beyond the surface. John's dedication to the crypto and blockchain space is not merely professional but also personal, as he possesses a genuine passion for the technologies that underpin this revolutionary industry. With his astute research skills and commitment to staying at the forefront of industry trends, John is a trusted voice in the world of cryptocurrencies, helping readers navigate the complex and rapidly changing terrain of digital assets and blockchain innovation. John Kiguru is an accomplished editor with a strong affinity for all things blockchain and crypto. Leveraging his editorial expertise, he brings clarity and coherence to complex topics within the decentralized technology sphere. With a meticulous approach, John refines and enhances content, ensuring that each piece resonates with the audience. John earned his Bachelor's degree in Business, Management, Marketing, and Related Support Services from the University of Nairobi. His academic background enriches his ability to grasp and communicate intricate concepts within the blockchain and cryptocurrency space. Business Email: info@crypto-news-flash.com Phone: +49 160 92211628

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