Life After The Shapella Upgrade
It’s been 2 weeks since Ethereum’s historical Shapella upgrade. So what’s happened since then?
As we reflect on the Shapella/Shanghai upgrade that went live on April 12th, it’s important to understand the impact it has on the future of Ethereum and how it will play a crucial part in its journey toward true decentralization and scalability. This upgrade is not just a simple technical improvement; it represents a shift in the Ethereum ecosystem and highlights the challenges and opportunities that lie ahead.
Withdrawals have been a primary talking point following the Shapella upgrade as they finally enabled users to regain control of their invested funds, along with any rewards they accrued over the months/years. Kraken, a popular CEX, has seen a substantial 598,893 ETH (35.1%) currently withdrawn due to SEC regulatory issues, which unfortunately netted them a hefty $30 million fine. To put this into context, here are some key statistics:
- Number of partial withdrawals currently: 1,378,615 ETH worth approximately $2,502,186,225
- The total amount of ETH withdrawn so far: 1,668,447 ETH worth approximately $3,056,727,808
- Number of full withdrawals: 22,614 ETH worth approximately $41,044,410
For a full breakdown of the data, check out Nansen.
While Kraken’s withdrawals are high, they are mainly due to circumstances out of their control. Lido, a liquid staking platform, on the other hand, has seen its fair share of withdrawals, accounting for 266,065 ETH (15.6%). This could indicate that users are actively exploring alternative options (such as other LSDs like Rocket Pool’s rETH and Coinbase’s cbETH), or that they are simply taking profits and re-evaluating their position.
There has also been an interesting dynamic shift in the balance between deposits and withdrawals. While there was an initial period where withdrawals outpaced deposits, this pattern has now flipped once again.
Deposits are currently surpassing withdrawals, but the situation changes daily with significant fluctuations in between. As of now, there are 78,447 deposits and 6,964 withdrawals, resulting in a net gain of 71,483. This ongoing exchange only continues to highlight the ever-changing nature of Ethereum’s ecosystem, as it continues to be shaped by shifting user decisions.
As we mentioned earlier, Liquid Staking Derivatives (LSDs) are a great alternative to getting involved in staking. They have only grown in popularity since their inception, mainly because of their ability to offer a more cost-effective and user-friendly approach to staking, all while maintaining liquidity for participants. As users continue to move away from traditional staking services, we can expect LSDs to play an increasingly prominent role in securing Ethereum.
At Vesper, we understand the importance of LSDs and the role they will play in the future of DeFi. Our support for them has been evident with the additions of stETH, rETH, and cbETH. Depositing these assets will enable users to enhance their capital efficiency by reaping the benefits of both beacon chain rewards and Vesper yield.
At the time of writing, there is 634,534 ETH waiting for withdrawal and 19,423 validators waiting for full withdrawal. Now, this may sound worrying to some with the numbers being so high. However, it’s crucial to note that this ETH only accounts for 3.36% of the total locked ETH, with 18,252,070 ETH (96.6%) having no withdrawal scheduled yet. A reminder that most users are in it for the long haul.
Ultimately, the Shapella/Shanghai upgrade is a major milestone for Ethereum. It provides a fascinating look inside at how the community continues to evolve and adapt in the face of these developments. As Ethereum moves closer to achieving its goals of decentralization and scalability, we can expect more exciting updates, growing pains, and innovative solutions to emerge.
