A data-driven analysis about the Ethereum’s Shapella Upgrade which enabled $ETH withdrawing
In today’s article we’ll recap what happened after the long-awaited Ethereum’s hard fork Shapella, which went live on Wednesday at epoch 194.048, finally allowing Ethereum stakers to withdraw their coins.
Before continuing, we recommend you to to catch up with our previous article on Shapella’s upgrade.
The price reacted well, surpassing $2000 (currently $2076, according to Token Unlocks) for the first time since August 2022, and it’s up 4% today at the time of writing.
Let’s now dive into some interesting data regarding this crucial network’s upgrade, which has remarkable consequences for everyone in the industry.
Before the hard fork, the retails’ sentement about Shapella was generally pessimistic, since the majority of people were pretty sure about the fact that enabling $ETH’s unstaking would have led to selling pressure, validators’ exit and uncertainty for the network.
Were they right?
Let’s find out.
Ethereum’s Shapella upgrade: testing users’ faith in the network
According to the data from TokenUnlocks, Ethereum stakers have withdrawn a fair amount of their staking rewards, but not their principal.
About 95% of withdrawals (the orange columns in the dashboard), which correspond to about 172.000 Ether, were rewards comingr from staking, while the other 5% were the actually $ETH staked (the yellow ones).
According to Nansen, of the 989.000 Ether pending to be withdrawn, a large amount belong to Kraken, which agreed to stop offer its $ETH staking product after pressure from the SEC in the past months.
Since Shapella Fork, 891k Ether were withdrawn, while 287k Ether were deposited, with a negative net staking balance of 604k Ether.
As we said, Kraken’s Ethers heavily impact the balance, but it’s important to remember that a lot of stakers (more than 70%, according from VC Drangonfly’s analysts) staked their coins when prices were much higher, so it’s legit to think that they’ve no incentives to sell now.
Also, when stakers participated in securing Ethereum network they knew that they woud have had to wait for a long period of time before being able to unstake their coins, and that shows that stakers were (and most still are) very aligned with the network.
Overall, in our opinion Ethereum stakers reacted well to the network’s upgrade, and that’s an important achievement for $ETH. While it’s possibile that there will be some uncertainty and volatily in the short term, in the long term the Shapella’s upgrade will greatly benefits the whole ecosystem.
Another intersting point of view regarding the Shapella upgrade can be found here.
Ethereum’s next steps: what now?
Vitalik Buterin, during an Ethereum Foundation’s livestream, said that from now on Ethereum’s developers will focus to improve scalability, since otherwise it will be impossible for the network to sustain higher on-chain activity without making users spend hundreds of dollars for transaction fees.
Most users still have nightmares thinking about the amount of dollars that they spent on gas fees during the last bull run!
The next big step on Ethereum’s roadmap will be proto-danksharding (a.k.a. EIP-4844), that could help delivering a 10x improvement in scalability, according to Buterin.
Proto-danksharding will help rollups making transactions cheaper, by eliminating data after fixed period of time, instead of storing them on-chain forever. This way, savings will be passed on final users, that will be able to utilize the Ethereum blockchain at way lower costs.
While Shapella was a crucial part of the Ethereum Roadmap, there is still a long way before Ethereum’s full development, which still have to face some important issues regarding scalability.
Will Ethereum be able to prevail against its Web2 centralized competitors and become the world leading payments system?