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- Ethereum’s Shapella upgrade has been successfully executed, enabling staking withdrawals and rewards for validators in the network.
- The hard fork marks a significant milestone, completing Ethereum’s transition to a proof-of-stake consensus mechanism and allowing users to access previously locked funds.
- Although the release of staked ETH could lead to short-term price fluctuations, experts believe that most holders will reinvest in the network due to their long-term commitment to Ethereum.
The long-awaited Ethereum Shanghai upgrade, also known as Shapella, has been completed, enabling staking withdrawals for validators and users who have staked their Ether (ETH) on the network. This marks a significant milestone in Ethereum’s transition to a full proof-of-stake system.
Shapella Upgrade Highlights
- The Shanghai upgrade was triggered at 22:27 UTC and finalized around 22:42 UTC.
- Within the first hour, 12,859 Ether were unlocked in 4,333 withdrawals.
- About 44% of validators can now request partial or full withdrawals.
- The majority of withdrawals at this time range between 2.8 to 3.2 ETH, indicating mainly staking rewards are being withdrawn.
Validators and Staking
- Validators stake at least 32 ETH to participate in the block validation process and secure the Ethereum network.
- Liquid staking providers emerged as an alternative for users without the full 32 ETH required for staking, allowing them to contribute any amount of ETH they want.
- Lido, the largest liquid staking provider, controls about 23% of all ETH staked, while Coinbase, Kraken, and Binance control another 22%.
Withdrawal Process and Potential Market Impact
- Two main types of withdrawals are available: partial and full withdrawals.
- Partial withdrawals allow stakers to withdraw only their earned rewards, while full withdrawals include the original staked ETH.
- With 18 million ETH ($33 billion) staked on the network, price fluctuations are possible; however, limits on the amount that can be withdrawn should mitigate the impact.
- Many ETH holders are underwater at the current market price, and most are committed to Ethereum long-term, suggesting withdrawn ETH may be restaked to new validators to compound rewards.
The Shanghai upgrade, marking the completion of Ethereum’s transition to a full proof-of-stake network, offers greater asset management flexibility for users. Despite potential short-term price fluctuations, the long-term impact on Ethereum’s ecosystem is expected to be positive.
This article is published on BitPinas: News Bit: Ethereum Network Completes Shapella Hard Fork, Enabling Staking Withdrawal Capabilities
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.