Shanghai Upgrade to Unlock 17M ETH Next Week: What to Expect?
- The withdrawal process is dynamic depending on the number of exiting validators.
- ETH price has remained relatively stable at $1,804 over the past week.
The Ethereum community is excited as the Shanghai upgrade is set to begin unlocking 17,000,000 ETH tokens from April 12, 2023. A crypto influencer on Twitter argued that while the long-term effects of this upgrade are favorable for the crypto market, there may be short-term negative impacts.
“It should get very interesting as people anticipate the outcome of such a big unlock,” the influencer that goes by the name Crypto Tony wrote, hinting at a possible massive dump on the market.
Notably, the Shanghai upgrade on the Ethereum blockchain is designed to enable investors to withdraw their staked rewards for the first time. After the update, ETH tokens worth over $32 billion are expected to become tradable on the market, which may provoke a bleeding trend.
However, according to confirmed reports, the unlocking process is dynamic depending on the number of validators leaving the network. Exiting validators would undergo an exit queue and withdrawal period and wait for 27 hours or 36 days for the withdrawal to be finalized. According to the report, the wide gap between the two waiting periods was to disincentive bad actors.
Recent statistics show that users are staking a big chunk of the total supply of different proof-of-stake (PoS) cryptocurrencies, including Cardano (ADA, 71%), Solana (SOL, 70%), of Binance Coin (BNB, 85%), and Polkadot (DOT, 50%).
In contrast, Ethereum, the most popular PoS blockchain, only has 16% of its tokens staked. Nonetheless, the price of ETH has remained relatively stable at $1,804 over the past week, with only 2% gains.