• Ethereum recently implemented the Shanghai upgrade to complete its transition from the Proof of Work to the Proof of Stake algorithm.
• CoinShares noted that the majority of withdrawals, over 80%, were triggered by the Kraken exchange.
• Ethereum has also made provisions for validators seeking to exit staking entirely.
Ethereum Shanghai Upgrade
Ethereum recently implemented the Shanghai upgrade to complete its transition from the Proof of Work (PoW) to the Proof of Stake (PoS) algorithm. This enabled investors to withdraw their staked ETH and raised concerns about a possible impact on price. According to CoinShares, less than 5 percent of validators have withdrawn funds with 19,500 in queue – indicating a waiting time of 12 days until all withdrawals are complete.
Kraken Exchange Responsible for 80% Withdrawals
CoinShares also noted that the majority of withdrawals, over 80 percent, were triggered by Kraken exchange which was recently ordered by US Securities and Exchange Commission (SEC) to shut down its staking services for US customers. The exchange paid $30 million disgorgement as part of SEC’s charges. At that time Kraken was third largest validator with 9 percent market share out of 16.7 million ETH locked in smart contract network.
Eligibility Criteria for Validator Withdrawal
Whether a given validator is eligible for withdrawal or not is determined by state of validator account itself without any user input required at any given time – entire process is done automatically by consensus layer on continuous loop basis .
Provisions Made For Validators To Exit From Ethereum Staking
As per March 2021 statistics , amount Ethereum staked on PoS Beacon chain was more than 16.7 million ETH or more than $27 billion via over 520,000 validators . In order to facilitate exit from staking , Ethereum has made provisions for such users who want to completely exit from staking process .
Impact On Price Of ETH After Massive Withdrawals?
It remains uncertain what would be long term implications on price after massive withdrawals but one thing is certain that this could have significant impact on price if large amount ETH is sold off due these withdrawals .