The Ethereum network is soon to undergo a major upgrade, referred to as the "Shanghai Upgrade". This upgrade will allow investors with staked ETH tokens to withdraw them, which will result in 17 million ETH tokens becoming available on the market. This is likely to cause significant impact on crypto markets, either positive or negative.

Benefiting the market are the long-term effects of this upgrade, which are perceived to be favorable. In the short term however, there may be negative impacts as an anticipation of a possible massive dump on the market is likely.

The unlocking of tokens is a dynamic process, and is dependent upon the number of validators that choose to exit the network. If a validator chooses to withdraw tokens, they must first go through a waiting period of either 27 hours or 36 days before the withdrawal can be finalized. The gap between the two waiting periods is designed to discourage bad actors.

Statistics have shown that other major PoS blockchains such as Cardano, Solana, Binance Coin, and Polkadot have significantly higher staking percentages than Ethereum, at 71%, 70%, 85%, and 50% respectively. This may indicate that Ethereum users are more in wait-and-see mode as the upgrade approaches, with only 16% of tokens being staked. ETH prices have remained relatively stable at $1,804 over the past week, representing only 2% gains.

The Shanghai upgrade, once in effect, could trigger a significant change in the way Ethereum networks, and the market as a whole. With the unlocking of seventeen million ETH tokens, the coming weeks may bring significant volatility to the already unpredictable crypto market, especially as more users will be able to access these tokens and make decisions on a larger scale. It will be interesting to see what effects this major upgrade will have on the crypto market as a whole.



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