Web3 Researcher Explains ETH Shanghai Upgrade Withdrawal Process

Early today, a Web3 researcher with the username WestieCapital on Twitter shared a stepwise walkthrough concerning the upcoming Shanghai upgrade on the Ethereum blockchain. The update, which will come up in March this year, will enable the withdrawals of staked funds for the first time.

WestieCapital noted that Ethereum’s withdrawal duration is dynamic depending on the number of validators leaving the network at any moment, in contrast to other proof-of-stake (PoS) networks like Cosmos, where the period is fixed at 21 days.

1/ Unlike other PoS networks like Cosmos that have a fixed withdrawal period for stakers, set at 21 days, Ethereum’s is dynamic based on how many validators are exiting at a given time.

— Westie ? (@WestieCapital) January 12, 2023

The researcher added that exiting validators would undergo two stages: the exit queue and the withdrawal period. After scaling through the exit queue stage, a validator may have to wait for either 27 hours or 36 days for the withdrawal stage to complete. According to Westie, the wide gap between the two waiting periods was to disincentive bad actors.

Recent data shows that the Ethereum Beacon Chain staking contract now holds more than 16 million units of ETH tokens. The 16 million staked ETH token is equivalent to over $22 billion, representing more than 13% of the coin’s market cap.

Ethereum hit this significant milestone only four months after transitioning to a proof-of-stake network. According to on-chain data from Nansen, the four major Ethereum validators are Lido, Coinbase, Kraken, and Binance, which jointly control over 55% of all staked ETH.

ETH currently trades at $1,408, with a 13% increase over the previous seven days. Crypto traders bought and sold over $9.5 billion worth of ether tokens in the last 24 hours.

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