shanghai, capella, chapela, 0x01, execution layer, consensus layer – the web3 community definitely boasts great technical prowess, but Ethereum’s latest update has sometimes confused even the best of us .
Nansen Report on Ethereum Withdrawals Reviewed by crypto slate We used data derived from Nansen’s data to shed light on all that is going on chapela dashboard.
ShahGuy calcium– Pella
The Shapella upgrade, successfully executed on April 13th, marked an important milestone in Ethereum’s multi-stage roadmap by enabling the withdrawal of staked Ethereum (ETH) on the beacon chain. This highly anticipated upgrade will reduce the liquidity risk associated with staking and encourage increased participation.
The name is a combination of two simultaneous upgrades, Shanghai and Capella. Shanghai upgraded its execution layer and Capella upgraded its consensus layer.upgrade Different The goal of both upgrades was to open drawers, so only regarding the part of the network they targeted.
Ethereum staking
Unlike other Proof of Stake (PoS) systems, Ethereum requires validators to stake a fixed amount of 32 ETH and is rewarded based on this amount. If a validator is reduced or penalized, he may exceed 32 ETH for rewards generated or less. To enable withdrawals, the validator must set the withdrawal credentials prefix to her 0x00 to 0x01.
Nansen’s data shows that since the Shapella upgrade, the number of validators with 0x01 credentials has increased from 40% to 83.3%.
Additionally, Ethereum’s staking system includes two types of withdrawals, partial and full.
Partial withdrawals involve withdrawing accrued rewards while maintaining a minimum of 32 ETH required for validator operations. This is routinely handled through an automated process that takes approximately 2-5 days.
Additionally, a full withdrawal includes withdrawing a validator’s entire balance either voluntarily or following a slash event. A full withdrawal takes longer than a partial withdrawal, which involves multiple steps: an exit queue, a “minimum validator withdrawability” delay of 256 epochs (27.3 hours), and an automatic withdrawal process (2-5 days ).
Why do stakers have to queue?
Egress queues act as safeguards to maintain the security of the Ethereum network. Its main function is to control the rate at which validators exit the network, preventing too many validators from exiting at the same time. If too many validators are terminated too quickly, the network may become vulnerable to attacks as it reduces the number of active validators protecting the network.
The 27.3 hour delay (equivalent to 256 epochs) imposed on the termination process is an additional security measure designed to give the network enough time to detect and respond to malicious activity. This delay acts as a safeguard, ensuring that bad actors cannot adversely affect the network and exit without consequences. Essentially, exit queues and associated withdrawal delays work together to maintain the stability and security of the Ethereum network during the validator exit process.
liquid staking
Liquid staking derivatives protocols (LSDs) such as Lido leverage liquidity to achieve capital efficiency, which can influence validator decisions. Since the Shanghai upgrade, the amount of ETH wagered on LSD has increased slightly. There is currently no dashboard to track whether this increase is primarily due to restaking, but it is likely that there is a correlation due to LSD benefits. Nansen is reportedly working on a dashboard to track this metric.
Understanding upcoming withdrawals is essential to evaluating the Ethereum staking ecosystem. One of the top payout rates, the Kraken is often misunderstood as one of the hot sellers. However, according to the report, most withdrawals are rewards, and validators are still in the exit queue or pending the automatic withdrawal process, so “full exits have had a substantial impact on total withdrawals.” Additionally, validators may request withdrawals for other reasons, such as switching validator setups or transitioning to the LSD protocol.
Nansen’s data on deposits and withdrawals provides valuable insight into the flow of ETH between locked and unlocked states, with cumulative totals used to estimate changes in the flowing supply of ETH.
Nansen Data Analyst Martin Lee commented:
“While the chart gives a good overview of changes in liquid supply, it lacks the nuance in inferring the impact of withdrawals. It is essential to know the difference between
Insights on Chapela
Lee’s Chapela hypothesis suggests that now that Ethereum withdrawals are live, the total amount of ETH wagered by participants and the network will increase. If so, it could bring Ethereum’s staking ratio closer to other major L1s.
This hypothesis is based on the observation that Ethereum has one of the lowest staking rates among the major L1s and is the only chain without withdrawals enabled until the Shanghai upgrade. As the upgrade approached, the amount of ETH staking increased rapidly, indicating strong interest in staking ETH.
But Lee also stressed that Ethereum’s staking rate may not be as high as some other chains, mainly due to its large NFT ecosystem and growing DeFi ecosystem.ETH ‘s different use cases set it apart from other leading L1 tokens and can impact staking rates. Lee believes it’s important to consider that the introduction of withdrawals does not necessarily lead to pressure to mass sell, as many factors can influence the decisions of validators and users. .
Lee ultimately argued that people were “jumping to conclusions” about what happened next.
- Kraken Unlocked = Mass Sales Pressure
- Overall trend of staked ETH volume based on current withdrawal data
- Just because Kraken is forced to end its US staking service does not mean that Kraken (or its customers) are selling. This means that you should exit as a validator. We still don’t know what users will do with ETH.
- Current withdrawal amounts are very volatile, with spikes here and there based on partial and full exits. It’s only been 4 days and no baseline has been established yet.
In conclusion, Shapella’s upgrade unlocked new possibilities for Ethereum staking and gave validators more flexibility. Understanding the nuances of partial vs. full withdrawals, the impact of LSD, and key metrics such as deposits and withdrawals will help crypto enthusiasts navigate this new landscape.
Post Everything you need to know about the ETH Shapella withdrawal was first posted on CryptoSlate.
