Last week Ethereum's Shanghai upgraded brought record-breaking weekly inflow of Ether (ETH) deposits for staking, with investors depositing 571,950 ETH tokens, worth more than $1 billion. It was the largest weekly token inflow in ether staking’s almost two-and-a-half-year history. Ethereum's technology upgrade allows investors to withdraw tokens previously locked-up in staking contracts for the first time. The ETH token surged following the successful implementation of the upgrade, but prices have since subsided.

The increased interest in ETH staking is due partly to institutional staking services driving the demand. Bitcoin Suisse, Figment, Kiln, Staked.us, and Stakefish combined staked a total of 235,330 ETH worth roughly $450 million. Not only has the inflow of investments from institutions been high but such liquidity risk associated with locking up tokens has been significantly reduced.

It appears that the record inflow is actually a result of investors choosing to reinvest their previously earned and withdrawn rewards from staking. Through the first eight days since the upgrade went live, investors withdrew 900,000 ETH in staking rewards. However, staking deposits still totaled 667,000 tokens, which was six times larger than the amount deposited during the last eight days before allowing withdrawals.

The Shanghai upgrade has had a much more positive impact on staking inflows than previously expected, with net inflow being positive and a majority of rewards being reinvested in new nodes. Not only does this mean that liquidity risk is much less than many had feared but it should also create less sell pressure on ETH tokens. This could in turn be a positive sign for the ETH price in the near future.



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