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Ethereum Staking Withdrawals Experience Delays After Initial Exodus of 1M ETH

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  • What – The Ethereum community has been eagerly anticipating the arrival of the Ethereum 2.0 upgrade.
  •  Why – The Shapella upgrade was a significant milestone in that process.
  • What Next – The upgrade introduced several new features, including withdrawing staked ETH from the Beacon Chain. 

Since the upgrade, over 1 million Ethereum has been withdrawn from the Beacon Chain, according to the Token Unlocks dashboard. However, the staking balance has not decreased by one million because 370,000 ETH were deposited during the same period. 

This suggests that some unstaked ETH is returning to liquid staking platforms such as Lido, which has increased its staked ETH balance by around 100,000 since the Shapella upgrade. 

The Lido share of the total staked has also increased to 34.7%, partly because Lido has yet to enable withdrawals for platform users. Despite the significant amount of ETH that has been withdrawn from the Beacon Chain, there are still 17.3 million ETH staked, valued at around $36 billion at current prices. 

The Nansen dashboard shows a slowdown in the pace of Ethereum withdrawals, which fell to just 2,415 ETH on April 16 when there was 3,008 ETH deposited. Industry analyst Colin Wu has reported that there is 892,000 ETH waiting to be withdrawn, with Kraken regulatory factor and Huobi shareholder changes being the main sources of withdrawals. 

The U.S. Securities and Exchange Commission has cracked down on staking this year, targeting Kraken’s staking services first, and Coinbase could be its next victim. 

According to Nansen, Coinbase accounts for 12.8% of Ethereum depositors, with around 2.37 million ETH staked. Despite the regulatory uncertainty, Ethereum prices have remained strong, holding above the $2,000 psychological barrier over the weekend.

Ethereum Price Tops The Chart

ETH hit a new 2023 peak of $2,129 during the Monday morning Asian trading session but has since retreated slightly. At the time of writing, ETH was trading at $2,098, holding on to last week’s gains. 

The asset has made an impressive 75% since the beginning of the year and could be leading markets into a new altseason. Total market capitalization has remained steady over the past 24 hours at $1.32 trillion.

The Ethereum 2.0 upgrade is expected to bring significant improvements to the network, including improved scalability and lower transaction fees. 

However, the transition to the new network is expected to take some time, and there will likely be bumps along the way. As the Ethereum community waits for the full rollout of Ethereum 2.0, many are turning to staking as a way to earn rewards while supporting the network. 

Staking involves holding ETH in a wallet and using it to validate transactions on the network, in exchange for rewards. Liquid staking platforms like Lido are making it easier for users to stake their ETH without worrying about the technical details of running a validator node. 

This has made staking more accessible to a wider audience and helped drive the Ethereum ecosystem’s growth. Overall, the Ethereum ecosystem continues to grow and evolve, with new use cases and applications constantly developed. 

As the network continues to mature, it will likely become an increasingly important part of the digital economy, providing a secure and reliable platform for various applications and services.

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