- Ethereum Staking contract witnessed record inflows after the Shapella upgrade as investors chose re-staking.
- However, there’s a clear shift in investors moving their ETH coins from centralized exchanges to decentralized staking protocol, amid the wave of regulatory crackdown.
Earlier this month, the Ethereum blockchain network underwent one of the most-awaited upgrades i.e. the Shanghai hardfork that allowed the investors to withdraw their staked ETH for the first time since the launch of the Beacon chain.
Although several analysts had earlier predicted a sell-off, this hasn’t actually happened. Rather, Ether (ETH) has continued to hit new milestones with now more than 19.3 million Ether (ETH) being deposited into the Ethereum Staking Contract.
This development goes to show that investor confidence in Ethereum has rather continued to grow ever since the Shapella upgrade. In fact, data shows that the Ethereum Shanghai upgrade brought a record weekly inflow of Ether deposits for staking during the last week.
Crypto analysts stated that a majority of these came through institutional staking service providers along with investors reinvesting their rewards after withdrawals. As per data from Dune Analytics, investors deposited a record 571,950 ETH tokens into staking contracts, worth more than $1 billion, as per data from 21Shares.
Ethereum’s native crypto Ether (ETH) is also showing strength recently and is trading at a price close to $1,900 levels.
The state of Ethereum staking withdrawals
It’s not that there have been no staking withdrawals since the Ethereum Shapella upgrade. As per crypto analytics firm Nansen, crypto exchanges Kraken and Coinbase together have witnessed 870,688 ETH withdrawals, which contribute 78.3 percent of all main withdrawals from ETH staking.
Nansen considers principal withdrawals as all withdrawals from ETH staking made by active validators in the Ethereum 2.0 network. These withdrawals happen whenever validators wish to withdraw their staked ETH and earn rewards in return.
However, crypto exchange Kraken has alone contributed to a total of 64.1 percent of all staking withdrawals. This is because the US SEC slapped a lawsuit last month on Kraken asking it to shut down its staking services under the threat of a lawsuit. As a result, all Kraken users who staked with the crypto trading platform started withdrawing their ETH soon after the Shapella upgrade on the Ethereum mainnet.
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However, the massive inflows towards ETH staking that Kraken users might have re-staked their ETH after withdrawing it from Kraken. On-chain indicators show this development as decentralized staking providers have been gaining new users over the past few days.
The above picture clearly shows that core exchange users have been moving their Ether to other staking offerings from decentralized protocols such as Lido, Rocket Pool, Frax Finance, etc.