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Ethereum Staking Outpaces Withdrawals After Shapella

2 mins
Updated by Geraint Price
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In Brief

  • Ethereum has seen notable inflows since the Shapella upgrade.
  • So far, only $3.6 billion has been withdrawn, with most outflows coming from Kraken.
  • Only a fraction of validators have chosen full withdrawals.
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Ethereum stakers have withdrawn 1,976,138.58 ETH ($3.6 billion) in staked ETH since developers enabled withdrawals in the Shapella upgrade in April.

ETH rewards make up 80% of the withdrawals, with roughly 3% of stakers exiting the through principal deposit outflows.

Lido Finance Staked About 6 Million ETH

There has been a notable increase in ETH staked since the Shapella upgrade, also known as the Shanghai upgrade, was completed at 22:42UTC on April 12.

This trend suggests Ethereum users see the asset as a long rather than a short-term investment.

In the last 24 hours, net deposits saw 47,974 ETH ($87 million) staked on Ethereum’s Beacon Chain. The ETH staked through principal deposits accounts for 93.6% of 18.9 million in locked ETH. Almost 97.3% of staked ETH is not liquid.

Staked ETH 7-Day ETH Deposits and Withdrawals | Source: Nansen
7-Day ETH Deposits and Withdrawals | Source: Nansen

Liquid staking service Lido Finance has staked almost six million ETH on the Beacon Chain. Lido, Rocket Pool, and other liquid stakers offered investors unwilling or unable to lock up 32 ETH on the Beacon Chain a chance to invest in Ethereum.

After Lido, crypto exchanges Coinbase, Binance, and Kraken have staked the most ETH with 2.3 million, 852,512, and 799,200.

Low Principal Withdrawals Ensure Ethereum Security

Developers opened deposits on the Beacon Chain in December 2020. Aspiring validators could migrate their node software to validator status by sending 32 ETH to the Beacon Chain’s deposit smart contract. The network would reward them for securing the network by successfully confirming and broadcasting transactions.

Full withdrawals remove the 32 ETH and any accrued rewards and revoke the node operator’s validator credentials. Around 15,395 validators have started full withdrawals. These represent about 2.6% of node operators responsible for securing the network. 

So far, most withdrawal requests have come from the institutional staking operator Kraken. There are currently 554,266 active validators, according to beaconcha.in.

Principal ETH Withdrawals | Source: Nansen
Principal ETH Withdrawals | Source: Nansen

Validators wishing to exit must wait in the “exit queue” before entering a withdrawal period, determined by the number of simultaneous withdrawal requests. A high withdrawal request volume will mean longer waiting times.

The Ethereum network has so far handled about 2,211,600 withdrawals.

The current price of ETH at publication is $1,831.65. The altcoin surged to about $2,100 post-Shapella.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...
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