Crypto analytics platform IntoTheBlock says this month’s expected Ethereum (ETH) upgrade will bring huge benefits to the ecosystem.
However, the leading analytics firm warns of near-term price volatility since the upgrade will allow validators to start withdrawing their long-staked ETH worth tens of billions of dollars.
“Overall, the Shapella fork concludes a milestone years in the making. EIP-4895’s enabling of withdrawals is expected to lead to short-term volatility as some locked ETH is withdrawn, sold or re-staked elsewhere. Through this process, market share within staking is likely to further strengthen LSDs [Liquid Staking Derivatives] at the expense of American exchanges undergoing regulatory scrutiny.
Finally, both ETH holders and Ethereum users will benefit from the upgrade longer-term as it leads to a more scarce native asset and a more secure blockchain.”
The upcoming upgrade to the Ethereum blockchain is known as “Shapella” and it refers to the simultaneous improvements that are expected to take place on both Shanghai, the project’s execution layer, and Capella, the project’s consensus layer. The part of the upgrade that allows validators to withdraw their staked ETH is known as Ethereum Improvement Proposal 4895 (EIP-4895).
The upgrades are scheduled to go into effect on April 12, which is when validators will have the opportunity to withdraw some of the more than $34 billion worth of staked ETH, according to IntoTheBlock.
“On April 12, 2023 – roughly 850 days after depositors began locking ETH into the deposit contract – validators will be able to begin the process of withdrawing some of the $34 billion-plus of staked funds.”
Ethereum is trading for $1,856 at time of writing, down 1.4% in the past 24 hours.
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/NextMarsMedia