So many ethereum validators filed requests to unstake ether (ETH) from the blockchain following Wednesday’s Shanghai upgrade that the queue to withdraw the cryptocurrency has been set back two weeks.
In the hours following the Shanghai upgrade (also known as Shapella) a "hard fork," or series of blockchain code changes that first enabled pledged ETH withdrawals -- the number of validators waiting to redeem has grown to About 17,000 for full withdrawals and 285,000 for partial withdrawals according to web browser ratings. (The market is not entirely consistent on this number. Blockchain analytics firm Nansen estimates full withdrawals at around 22,000, while a data dashboard on the Ethereum Foundation-sponsored Metrika website also puts the figure at around 17,000.) According to Nansen, the total number of validators is about 567,000, so only 4% of validators are waiting for a full withdrawal. A full withdrawal is when a validator requests a return of their entire original deposit of 32 ETH (worth ~$64,000), which is the amount required to participate in the proof-of-stake network.
And, according to Rated, the ethereum blockchain appears to be processing withdrawals at only 55.4% of its capacity The result is a wait time of about 14 days. That’s much longer than several blockchain analysts in Shanghai had estimated and could take anywhere from hours to days to clear the backlog of orders.
Validators associated with cryptocurrency exchange Kraken make up about 80 percent of that queue, blockchain analysts noted. This dynamic was expected, as Kraken agreed to a settlement with the SEC in February, shutting down its U.S.-based staking service. At the same time that stakers began withdrawing their accrued rewards, blockchain analytics provider Nansen indicated that Ether (ETH) deposits on the Beacon Chain had begun to grow, indicating stakers’ desire to continue participating in Ethereum’s maintenance of the blockchain . But on a net basis, withdrawals still exceed deposits. At the time of publication, the Beacon Chain’s 24-hour net deposit change is currently negative 79,488 ETH (minus 0.4%).
Data on Shanghai’s upgrade will continue to pour in as more liquidity staking providers also allow their users to withdraw staked ETH. Late Thursday, cryptocurrency exchange Coinbase, which holds about 12.6 percent of ETH collateralized, will allow its users to decide whether to unstake. Ethereum developers meet on Thursday to report on Shanghai.
