The recent announcement of the Ethereum Shapella hard fork, or the Shanghai Upgrade, has sparked significant attention from the crypto market. This hard fork, which is set to take place on 12th April 2021 at around 10:27 PM (UTC), will make it possible for users to withdraw their staked ETH. As per Etherscan data, a total of 18 million ETH (valued at around 33 billion USD) has been staked onto the network since the launch of the Beacon Chain in December 2020.

The unlocking of ETH will not be possible in a single go. This is because Ethereum has taken measures in order to prevent over-withdrawal of ETH tokens. Additionally, the queues for withdrawals may vary based on the source of holding these tokens. For example, Lido, which holds almost a third of the staked ETH, has stated that withdrawals will start taking place in May 2021.

The amount of tokens that will be withdrawn is unknown as of now. However, as per market commentators, the withdrawal demand is likely to surpass the new staking deposits on Ethereum. This could drive the selling pressure quite strong, potentially to the tune of a billion dollars. The big picture here is that the withdrawal of staked ETH will make staking of ETH more rewarding and reduce the risk involved for individual investors.

The volatility intrinsic in liquid staking tokens, which claim to replicate staked Ether, is also expected to rise. Developers of Ethereum have a history of successful software changes, and the Shanghai upgrade seems to be headed this way as well. Increased Securities and Exchange Commission (SEC) scrutiny is also likely, considering the regulatory authority in the US has already warned of staking ventures that guarantee returns.



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