Coinbase warns that the waiting period for receiving unstaked ETH could be months

Updated: 16 March 2023

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Ethereum developers are preparing to activate the Shapella fork on the project’s mainnet, which has caused some concern among participants of the ETH staking program offered by Coinbase. The exchange stated that customers would be able to unstake their assets as soon as 24 hours after the fork gets activated.

However, the exchange also added that the waiting time for the payouts would be entirely controlled by the protocol. As a result, the ETA of funds would be very unpredictable. According to the exchange, withdrawal requests might even take months to complete.

The withdrawals could take months, warns Coinbase

The exchange explained that validators would have to join an exit queue in order to withdraw their funds. However, the number of users exiting the network is controlled by the churn limit. This system was set in place in order to prevent a mass exodus and thus prevent users from suddenly destabilizing the network.

The exchange said:

If you’d like to unstake, Coinbase will begin taking unstaking requests about 24 hours after the upgrade completes. All unstaking requests are processed on-chain, and we’ll pass the unstaked funds and staking rewards to you once released by the Ethereum protocol.

After the validators leave the queue, they would enter a withdrawal period, and its length remains unknown. According to the exchange, it could last anywhere from a few weeks to several months.

ETH developers have introduced a limited number of daily withdrawals, which sits at 57,600 withdrawals per day. However, if validators decide to withdraw all of the funds that they have staked, the withdrawal period will certainly last longer.

6/ Since the Ethereum protocol controls the unstaking process and we’re simply the conduit, we can’t share an exact waiting period when you request to unstake.

— Coinbase 🛡️ (@coinbase) March 15, 2023

Goerly tests have been successful

One of Ethereum’s developers, Tim Beiko, also commented recently, stating that the Shapella fork has already taken place on the project’s public testnet, Goerli. This is essentially the last stage of testing and preparation before the fork gets implemented on the mainnet, which would enable the withdrawals of staked assets.

Goerli forked!

— timbeiko.eth (@TimBeiko) March 14, 2023

After announcing that Goerly forked, Beiko added that deposits were being processed, but it seemed like several validators had not upgraded. This is a common issue, as the ETH used on the testnet does not have actual value, so there is less incentive for validators to participate. However, he added that another possible issue could be a large number of withdrawal credential charges processed right at the fork. Since this is the first time that people were allowed to submit such charges, there are many more that need to be processed. He, too, concluded that the process can last a while and even lead to missed blocks or attestations on low-resource nodes.

Staking was introduced on Ethereum on September 15th, 2022, after developers changed the project’s consensus mechanism from PoW to PoS. Those who wanted were able to send 32 ETH to a staking contract on the newly available consensus network. However, those who were unable or unwilling to send the funds were able to join a liquid staking protocol, where they would receive derivative liquidity tokens for staked ETH.

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