According to a public release, the core developers of the Ethereum blockchain scheduled the Shanghai-Capella upgrade to go live on the Sepolia test network on February 28 at epoch 56832.
A network upgrade named Shanghai-Capella, also known as Shapella, aims to make it possible to withdraw ether (ETH) from network validators, a function that wasn’t made available during The Merge when the network switched to proof-of-stake consensus. Changes to the consensus layer (Capella) and execution layer (Shanghai) are combined in this upgrade. While Capella updates the blockchain’s consensus layer, Shanghai updates Ethereum’s execution layer.
With this upgrade, Beacon Chain stakers withdrawals of more than 16.5 million ETH will be enabled which amounts to $26+ billion. Yet even if all Ethereum validators were to leave the network, it would take roughly a whole year given the daily restrictions. About three weeks from the start of the unlocking procedure, more than one million ETH coins will become available to withdraw as part of the staking reward.
Current deposits total 16.8 million ETH.
The majority of ETH has been deposited on Lido (29.5%), with combined deposits from Coinbase, Kraken, and Binance totaling 26%. It is crucial that companies offering liquid staking, like Lido, become sufficiently decentralised to avoid censorship.
These are the price ranges at which illiquid, decentralised, and centralised liquid depositors made their deposits. ETH price around $600 caused the first increase, which was followed by pretty steady deposits up to $3,400 before tapering off.
Presently, illiquid stakers who are in profit own 24.5% of all staked ETH, or about 4.1 million ETH ($6.9 billion). When withdrawals are made possible at the Shanghai upgrade, this is arguably the category that is expected to sell the fastest.
►Conclusion: It is estimated that 1 million ETH will be available on the open market within the first three weeks of the upgrade. Because the withdrawals will take place across several months, not all 16 million ETH will be available at once.
The majority of these stakers, according to experts, will transfer their holdings to liquid staking platforms like Lido in order to generate passive income from their assets rather than selling them. It is difficult to predict whether all of the stakers will remove their holdings and sell them on the open market, but some may do so, which would indicate impending volatility in the cryptocurrency market if the ETH marketcap experienced turbulence which is very likely.
