Ethereum staking volume surpasses withdrawal volume after Shapella upgrade

The Ethereum blockchain underwent a critical Shapella upgrade on April 12, marking a milestone in the blockchain’s history. The upgrade allowed validators to withdraw their staked Ether (ETH) from the Beacon Chain after three years, opening the possibility of mass sales. However, the latest data suggests that most validators are choosing to reintroduce their unlocked Ether, contributing to an increase in staked ETH volume.

According to on-chain research firm Nansen, the ETH stake volume of 124,000 ETH as of April 17 exceeded the withdrawal volume of 64,800 ETH for the first time since the Shapella upgrade. During the last 24 hours, the amount of ETH staked was 94,968 against 27,076 in withdrawals. In particular, the first round of withdrawals consisted primarily of partial withdrawals from Lido and old validators, and it takes about three days to enter the withdrawal queue.

The Shapella upgrade was a make-or-break situation for the Ethereum blockchain, with millions of unlocked ETH at risk for mass selling. However, the data shows that the majority of validators choose to catch up on their unlocked Ether. Crypto exchange Binance is set to open withdrawals on April 19, which could lead to further changes in staking and withdrawal volumes.

Of the 1 million withdrawn ETH, three addresses rescinded a total of 19,844 ETH, suggesting that validators are actively choosing to remain invested in the blockchain. Three addresses transferred ETH to centralized exchanges (CEXs) after withdrawal, with 71,444 ETH sent to various exchanges. Other whales did the same, with some sending it to Huobi staking addresses and a few others to CEXs, according to data shared by Lookonchain.

While some validators, like Kraken, had to terminate to comply with a decision by the United States Securities and Exchange Commission, the majority of early withdrawals are stake rewards. Currently, 22,231 validators have signed up for a full exit of 574,624, while 910,930 ETH of the 18.6 million staked ETH are slated to be withdrawn.

One of the reasons for the decline in withdrawals can be attributed to the current price of ETH. The average price of staked ETH is around $2,137, suggesting that validators are choosing to keep their holdings rather than sell them at current prices.

In conclusion, the Shapella upgrade has been a success for the Ethereum blockchain, with the majority of validators choosing to remain invested in the platform. While some early withdrawals were stake rewards, the majority of validators are recovering their unlocked Ether, which has contributed to an increase in staked ETH volume. As the situation continues to evolve, it will be interesting to see how the balance between staked and withdrawn ETH evolves over time.