- The Shapella upgrade is set to be launched, but only a few validators are planning to withdraw.
- Ethereum has performed poorly compared to Bitcoin ahead of the upgrade.
Shapella upgrade, scheduled for April 12, 2023, is said to be a follow-up of the famous Ethereum Merge that transitioned the network from the Proof of Work to the Proof of Stake algorithm. Shapella is said to combine the Shanghai and Capella validator changes. With Shanghai upgrading the network’s execution clients and Capella focusing on the consensus layer or consensus clients, both will occur simultaneously. The purpose of the Shapella upgrade is to enable staking validators to withdraw their funds for the first time.
As of the time of writing, $34 billion or 18.14 million ether is locked in the Beacon chain contract. This is about 15 percent of all Ethereum in circulation The withdrawal of the funds will be subjected to specific thresholds built into the rules. According to reports, some validators would have to submit their wallet addresses for full withdrawals. Those with excess funds earned from staking and validating, and have valid addresses would be subjected to partial withdrawal. Those who qualify for full withdrawal can remove their entire 32 ETH required to stake and exit the validator system.
After a smooth Goerli transition, client teams have scheduled the Shapella upgrade for mainnet activation. The consensus was quickly reached on an April 12th date during the 157th All Core Devs Execution Layer meeting. This upgrade follows The Merge and enables validators to withdraw their stake from the Beacon chain back to the execution layer. It also introduces new functionality to both the execution and consensus layer.
Few validators willing to withdraw after the Shapella upgrade
Interestingly, data from IntoTheBlock shows that 0.6 percent of Ethereum validators are planning to withdraw their funds after the fork. As of April 10, just 3,614 out of 562,717 Ethereum validators had decided to withdraw their stake.
Unlocking this for withdrawal is expected to cause a market dump from investors. Coinbase predicted that there will be a high volume of withdrawal requests after the upgrade. According to them, this could take weeks or months to process.
Unstaking requests will open to all Coinbase customers at the same time and will be relayed to the Ethereum protocol and queued based on when they are received…Customers may need to remain patient. We anticipate the Ethereum protocol will take weeks to months to process unstaking requests immediately following the upgrade.
Research from analysts at Kaiko has stated that Ethereum has performed poorly compared to Bitcoin ahead of the Shapella upgrade.
Ethereum’s spot volumes have struggled to maintain pace with bitcoin’s, with Ethereum’s market share of USD volume recently hitting its lowest levels since March 2021.
Ethereum is down by 2 percent in the last 7 days, and also down by 2 percent in the last 24 hours. With a current bullish sentiment, Ethereum is trading at $1,894.10. Bitcoin is also up by 6.9 percent in the last seven days and trading at $30,364.29.
Recommended for you:
- Buy Bitcoin Guide
- Bitcoin Wallet Tutorial
- Check 24-hour Bitcoin Price
- More Bitcoin News
- What is Bitcoin?
Subscribe to our daily newsletter!
No spam, no lies, only insights. You can unsubscribe at any time.