This April, Ethereum blockchain will be upgraded to the Shapella version which brings simultaneous improvements to Shanghai and Capella. Ethereum Improvement Proposal 4895 (EIP-4895) enables validator nodes to begin withdrawing the estimated $34 billion USD worth of ETH that is locked in the deposit contract. The upgrade is speculated to be beneficial for Ethereum users in the long-term, although it is possible that the short-term could bring market volatility since the locked ETH can be sold or re-staked somewhere else.

The short-term volatility could both benefit and affect investors and validators. On the one hand, it could open up more liquidity of ETH and make holding ETH more exciting. On the other hand, some exchanges, such as the American ones, may not benefit from this due to the coming regulatory scrutiny.

The Shapella upgrade has been long anticipated by the Ethereum community. It is expected to bring about a more secure blockchain due to reducing the liquidity of ETH, as well as boosting the transaction speed needed to settle payments. IntoTheBlock reports that the moment of withdrawal will happen on April 12 2023, after nearly 850 days of locked funds.

At this time, ETH is trading for $1,856, having dropped 1.4% in the last 24 hours. For those invested in Ethereum, this upgrade provides the opportunity to take part in the coming market volatility and benefit from the anticipated improved security of the blockchain. It is possible investors will switch to exchanges with more clear regulations and higher security, since it is likely that some of the staked funds will be sold. As well as keeping a close eye on the development related to Shapella and the withdrawal period, investors should stay alert to changing regulations and be prepared to familiarize themselves with the exchanges. With this in mind, investors can look towards further potential benefits that the Shapella upgrade may bring.



Other News from Today