The much-anticipated Shanghai upgrade, also known as “Shapella”, finalized on the Ethereum Blockchain late Wednesday, unlocking over $34 billion worth of staked Ether for withdrawals.
Shanghai is the biggest event since the Merge in September 2022. Its finalization now means that users who had staked 32 Eth in the network’s deposit contract since the beacon chain was launched in 2020 can claim rewards and withdraw their Ether balance.
“We’re in a stage where the hardest and fastest parts of the Ethereum protocol’s transition are basically over. Very significant things still need to be done, but those very significant things can be safely done at a slower pace,” Ethereum co-founder Vitalik Buterin said during a live stream that showcased the upgrade to thousands of attendees globally in real-time. Buterin further noted that they would focus on scaling Ethereum after Shanghai to make transactions cheaper and faster.
Ether and Bitcoin Prices Remain Flat
Notably, despite earlier fears of the upgrade triggering a price dump, Ether and Bitcoin remained flat during and over five hours after the event.
As ZyCrypto reported, validators have the choice to withdraw their ether partially or fully. Currently, the network is limited to handling only 16 partial withdrawals per time slot, which takes approximately 12 seconds. As a result, withdrawals may take several days to weeks to complete. In the meantime, full withdrawal requests will also be added to the queue, but they will be processed much more slowly.
With the current limits, only about 1800 validators can be withdrawn daily, equating to 57.6k ETH daily. At press time, roughly 72,700 Eth ($140 million worth) had been withdrawn according to Flipsidecrypto. The amount of Ether withdrawn so far thus translates to about 0.38% of the total amount staked.
On April 11, Glassnode estimated that a total of 170k ETH (323M) would be sold stating that based on their analysis, “the impact on the Ethereum economy is expected to be a lot less dramatic than many have painted it to be.”
Furthermore, last month, Crypto Quant noted that 60% of all staked ether was held at a loss, a factor that would significantly reduce the selling pressure once Shanghai goes live. According to experts, these safety nets could play a crucial role in keeping Ether’s price stable.
At press time, Ether was trading at $1986, up 6.78% in the past 24 hours. Bitcoin was exchanging hands at $30,233, up 0.78% over the same period, as per CoinMarketCap.