As validators wait for their time to receive incentives earned by protecting the network, about $2 billion worth of Ethereum ($ETH), the second-largest digital currency by market capitalization, will be taken from the cryptocurrency’s network.
Following the well anticipated Shapella hard fork, which went live on the Ethereum network last week, validators may now withdraw their tokens. The upgrade put Ethereum Improvement Proposal (EIP) 4895 into effect, allowing staked Ether to be removed that had been locked on the network ever since the Beacon Chain was introduced.
It is anticipated that the update, which brings Ethereum fully into the Proof-of-Stake consensus process, would cause short-term price volatility when part of the pledged Ether is removed. Due to withdrawal cap restrictions, not all of the 18 million staked ETH will be readily accessible for withdrawal at once.
The Shapella update allows for partial and complete withdrawals of staked ETH. The validators are kept operational by partial withdrawals, which automatically distribute the ETH to them and provide them with the necessary 32 ETH balance. Complete withdrawals remove the whole staked amount and halt the validator.
According to statistics from TokenUnlocks, there are around $1.9 billion worth of ETH that have been staked on the network and are awaiting withdrawal. According to platform data, the majority of Ethereum validators are withdrawing payouts rather than the capital they spent to maintain validator nodes and earn rewards. According to statistics, there have been 1,200 fewer validators since unstaking became possible.
Approximately 44% of the Ethereum tokens that are awaiting withdrawal originated from stakers who used the cryptocurrency exchange Kraken, according to statistics from Nansen, while 21% came from stakers who used Binance. About 19.5% of the Ethereum that has been taken came from Kraken stakers, while 24.6% came from LidoDAO stakers, who use a liquid staking service.