December 5, 2023

Ethereum recently implemented the Shanghai/Shapella upgrade, which is groundbreaking for its investors. How does this affect staking?

The upgrade was successful but the price dropped

Implemented over a month ago, this very important upgrade allows ETH stakers to withdraw locked tokens and helps increase liquidity on the Ethereum network. Newfound liquidity can also act as a catalyst, encouraging developers to be creative from new opportunities offered by diverse solutions.

However, not all is rosy, with ethereum’s value down 14% in a month despite more than halving its value since January; market analysts attribute the volatility to investors Sentiment on recession risks and potential economic fallout from concerns over a U.S. banking crisis.

Staking activity exceeds expectations

Staking activity exceeded expectations. according to For BeaconScan, there are now over 18.5 million ETH staked; there are also about 702,000 validators participating in the network, with an average yield of about 5.5%. Thus, by increasing fees on its network, stakeholders benefit from higher yields, which currently peaked last year.

The value of staked Ether has grown significantly while the overall supply has plummeted. This trend has forced many investors to consider ETH as a strong competitor to U.S. Treasuries, as it offers a 5% equivalent yield with shorter maturities of less than 30 days.

While there was initially a backlog when withdrawing ether, the wait time has now reached zero days and only 30 days to enter the staking queue. The development exceeded expectations a month ago.

While Ethereum’s fees have skyrocketed, so has the staked ETH, bringing higher returns to investors. Additionally, the introduction of Shapella facilitated a significant increase in new depositors on the network. The number of independent depositors has grown by about 8% since April 12, as more people expressed a willingness to lock up funds for a return while keeping withdrawal options open.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.