Ethereum 2.0, the next version of the world's second-largest cryptocurrency, introduced staking as a way to secure its network and generate passive income for investors. However, recent changes in regulations and upgrades to the Ethereum network have caused concerns about the future of staking deposits. In particular, the Shapella upgrade and regulatory changes have led to a decrease in deposits, leading to questions about the future of Ethereum staking.

The Shapella upgrade, which was implemented in December 2021, brought significant changes to the Ethereum network. The upgrade included a change in the proof-of-stake consensus mechanism and introduced several new features to the network. While the upgrade was aimed at improving the security and functionality of the Ethereum network, it also resulted in a decrease in staking deposits.

One of the main reasons for the decrease in deposits was the change in the staking minimum. The Shapella upgrade increased the minimum amount required to stake from 32 ETH to 123 ETH. This meant that many small investors were priced out of staking, which led to a decrease in deposits. Additionally, the upgrade introduced penalties for stakers who failed to validate blocks, which further discouraged smaller investors from participating in staking.

Regulatory changes have also contributed to the decrease in staking deposits. Several countries have introduced regulations that require stakers to comply with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) laws. These regulations have made it more challenging for investors to stake their Ethereum, as they now have to go through a lengthy and complicated process to comply with the regulations. This has led to a decrease in deposits, as many investors are hesitant to undergo the additional compliance requirements.

The decrease in staking deposits has raised concerns about the future of Ethereum staking. Staking is an essential part of the Ethereum network, as it helps to secure the network and generate passive income for investors. If the decrease in deposits continues, it could lead to a decline in network security and a reduction in staking rewards for investors.

In conclusion, the Shapella upgrade and regulatory changes have led to a decrease in Ethereum staking deposits. The increase in the staking minimum and penalties for stakers, along with the introduction of KYC and AML regulations, have made it more challenging for investors to participate in staking. This has raised concerns about the future of staking and the overall security of the Ethereum network. However, it is important to note that the Ethereum community is constantly working to address these challenges and find solutions to ensure the long-term viability of staking.

#Ethereum #shapella #shanghai #ETH #dyor

The Ethereum blockchain is set to undergo a significant upgrade called the Shanghai upgrade or Shapella upgrade on April 12, 2023. This upgrade includes several improvements to the network, including the implementation of two Ethereum Improvement Proposals (EIPs) known as Shanghai and Capella.

One of the main benefits of the Shanghai upgrade is a reduction in gas fees for developers on the Ethereum network, which will make it more cost-effective to build decentralized applications. The upgrade also aims to improve scalability and address issues related to token withdrawals.

The Shanghai upgrade comprises five EIPs: EIP 3651, 3855, 3860, 4895, and 6049. These EIPs provide solutions to issues related to transaction fees, scalability, and token withdrawal functionality.

Additionally, the Capella upgrade will enable full and partial withdrawals for validators on the Ethereum network. This upgrade is significant as it addresses the needs of validators who often have to manage large amounts of capital in the form of cryptocurrency.

What Ethereum holders need to do?

If Ethereum holders and users are using an exchange, digital or hardware wallet, they typically do not require any extra actions, unless specifically advised by the wallet provider.

What happens if stakers or node operators do not participate in the upgrade?

It is important for Ethereum users to update their clients to the latest versions because failure to do so can result in the client syncing with the pre-fork blockchain after the upgrade process. This would leave the user stuck on an incompatible chain and unable to operate on the post-Shanghai blockchain network. Therefore, it is crucial for users to participate in the upgrade to avoid any disruption.

The expectations of the community of Ethereum holders

The community of Ethereum supporters, known as "ETH Maxis," as well as analysts and developers, have presented various potential scenarios for ETH following the hard fork on Crypto Twitter. According to experts, the unlocking of ETH tokens could result in a temporary sell-off of the altcoin. However, a significant amount of staked ETH might be directed towards liquid staking projects or other staking options due to the current price of the altcoin and holders being at a loss during the unlocking period.

Another scenario arises from the Shapella upgrade being front-run and Ethereum's recent price rally, which reached a 2023 high above $1,900. It is possible that the ETH upgrade has already been factored into the price, and the token unlock may have little or no negative impact as previously anticipated by the community.

83% of ETH holders plan to stake more Ethereum within the next three months.

A recent survey carried out by the OKX exchange revealed that 83% of the respondents from the ETH community are optimistic about an increase in Ethereum staking over the next three months.

Following are the key findings of the survey:

Key findings of the OKX survey

As the token unlock is set to take place for the first time since the launch of the Beacon Chain contract in 2020, holders of ETH are confident that more tokens will be staked within the next three months, bolstering a bullish outlook for the asset in the medium-term.

The upcoming Shapella upgrade marks a pivotal moment for the Ethereum ecosystem, presenting an array of noteworthy advantages that are poised to entice a greater number of users and investors to the platform. With an assortment of improvements ranging from reduced gas fees for developers to enhanced scalability and transaction fee management, the upgrade is set to bolster the network's functionality and appeal. These developments are expected to significantly enhance the Ethereum blockchain, reinforcing its status as a leading blockchain technology.

#eth2.0 #shapella #shanghai #crypto2023 #shanghaiupgrade

As Ethereum nears this week’s much-anticipated Shanghai upgrade, investors and blockchain developers are already mapping out the blockchain’s next steps after it completes the transition to a fully functioning proof-of-stake network.

The upgrade is sometimes referred to as "Shapella" because the planned changes to the blockchain's execution layer are collectively known as "Shanghai," while changes to the consensus layer are known as Capella. (Shanghai + Capella = Shapella. Get it?) The ensemble is changes are expected to go into effect on Wednesday around 6:30 pm ET, enabling withdrawals of staked ether for the first time.

It can seem like Ethereum is always in a state of development. Almost as soon as the blockchain completed its "Merge" last September, another key milestone in the transition to proof-of-stake, developers started focusing on Shapella.

Now that staking, an integral part of ensuring the security of the blockchain, will be complete, here’s what experts say Ethereum observers can expect in the coming months and years on the second-largest blockchain.

EIP-4844, proto-danksharding and ‘blobs’

Sharding, a concept aimed at increasing Ethereum’s scalability through more efficient data storage, is starting to make its way toward reality.

Originally drawn from computer science, sharding splits the blockchain into smaller pieces, known as “shards,” in essence creating multiple mini-blockchains. Think of it like adding lanes to a highway: More cars have space to maneuver, so there’s less congestion. On Ethereum, splitting the network into shards can allow for more space to process transactions, and therefore lower "gas prices" or fee rates.

Danksharding does the same thing, but instead of using the shards to increase the number of transactions on Ethereum, it does so to increase space for groups of data, or “blobs,” allowing more data to be processed (which will be especially helpful for lowering transactions costs for layer 2s).

EIP-4844, or proto-danksharding, is the first prototype for danksharding, expected to hit Ethereum’s mainnet sometime in the third quarter of this year.

To kick off the march to that milestone, Ethereum developers have released what they're calling the KZG Ceremony – a coordinated “public ritual” that will provide a foundation for proto-danksharding. This ceremony is needed to kick start the process of bringing proto-danksharding into the protocol.

“If EIP-4844 is a car, this KZG commitment scheme that we're helping to construct is the engine,” said Trent van Epps, a protocol generalist at the Ethereum Foundation. “This random string of letters and numbers is like helping to kickstart this engine.”

Read more: Scaling Ethereum Beyond the Merge: Danksharding

The Verge, The Purge, The Scourge

In November, Vitalik Buterin, co-founder of Ethereum, released an updated roadmap, a set of issues to be tackled.

After EIP-4844 comes what’s known as the “Verge,” where Verkle trees will be introduced, another move to increase scalability.

Verkle trees will allow developers to store large amounts of data, and users only need to show a single piece, or a short proof, of that data to verify that they have a root of that tree. Verkle trees will make data proofs much more efficient, though this is still a new concept in cryptography and not yet widely used.

The “Purge” will purge the spare, or historical data, from the Ethereum network. By getting rid of this historical data, congestion on the network will decrease, allowing for more transactions to be processed. Buterin has said that after this phase, Ethereum can hopefully process around 100,000 transactions per second (TPS), up from about 29 TPS now.

Read more: Ethereum After the Merge: What Comes Next?

Buterin added the “Scourge” as the latest element for Ethereum to tackle, in an effort to make the blockchain a credible and neutral place for transaction inclusion, while simultaneously avoiding centralization around MEV.

MEV, or maximal extractible value, is the profit that comes from rearranging or including certain transactions within a block. MEV-bots are used by searchers to maximize MEV, typically by front-running trades or carrying out other malicious attacks that extract large profits away from regular users.

Flashbots, an Ethereum research and development organization, came up with MEV-Boost, a software aimed at equalizing MEV for validators and making it easy for them to get a piece from the MEV cake. But Flashbots suffered backlash after announcing in August that it would censor Tornado Cash transactions, after the U.S. Treasury sanctions of the privacy mixer.

Part of the Scourge’s aim would be to address these censorship and MEV issues through proposer-builder separation (PBS) embedded in the protocol. PBS would separate building and proposing blocks into two different roles, and Buterin suggests adding “inclusion lists” to prevent block builders from censoring transactions in the future.

So if you thought that Ethereum was through with major upgrades, just stick around.

#ETH #Ethereum #shanghai #Binance #crypto

Crypto exchanges received a net inflow of 179,500 ether (ETH), worth some $375 million in the four days after Ethereum’s Shanghai upgrade went live, according to crypto data firm CryptoQuant.

CryptoQuant data shows that traders deposited 1,101,079 ETH to exchanges between April 13 and April 16, while only removing 921,579 tokens. This was the largest four-day net inflow in a month.

Investors transferring tokens to exchanges usually indicates they are preparing to sell, which may lead to a price decline.

On April 12, Ethereum successfully implemented a long-awaited tech upgrade, also known as Shanghai. The upgrade has enabled withdrawals for the first time from Ethereum’s proof-of-stake blockchain, which has some 18 million ETH, worth $36 billion, locked in staking contracts.

Before the upgrade, some crypto watchers worried that the event would flood the market with millions of unlocked ETH and crash the second largest cryptocurrency’s price, although others predicted little impact or that the price would rise. News of a seamless implementation pushed ETH’s price above $2,100 the day following, its highest level since May 2022. ETH outperformed bitcoin (BTC) in that 24-hour period. ETH was recently trading at about $2,070, down more than 2% over the past 24 hours.

Data suggest that some traders have sold ETH during the price rally post-Shanghai.

Since the upgrade, the ETH-USD trading pair on crypto exchange Coinbase recorded $28 million more sell orders than buy orders, crypto market research platform Kaiko reported Monday.

Coinbase was one of the first exchanges that let users immediately unlock and withdraw their staked ETH via its platform. Binance, the world’s largest crypto exchange by volume, will follow suit on April 19, which “could result in more sell pressure for ETH,” Kaiko wrote.

ETH pared some of its earlier gains, and recently has been changing hands at $2,079, per CoinDesk data.

#ETH #shanghai #crypto2023 #crypto #Binance

Ethereum's Ether (ETH) token dropped by over 7.5% in its Bitcoin (BTC) pair in 2023. But ETH/BTC may wipe its year-to-date (YTD) losses entirely in April as Ethereum's long-awaited Shanghai hard fork is just days away.

The upgrade is set for April 12, enabling Ethereum stakers to withdraw around 1.1 billion ETH in rewards — worth over $2 billion as of April 8.

ETH price undergoes key technical bounce

Many experts see the hard fork as bullish for Ether in the long term. For instance, the Shanghai buzz has helped Ether outperform Bitcoin in April so far.

As a result, the ETH/BTC pair has risen by about 4.75% month-to-date to reach 0.066 BTC as of April 8, a nearly 8% rebound since March 20.

The bounce was largely expected, particularly as ETH/BTC dropped to its historical ascending trendline support. Now, the upside move raises the prospects of an extended bullish retracement toward its descending trendline resistance, marked as a sell zone in the chart below.

ETH/BTC three-day price chart. Source: TradingView

The fractal-based outlook puts Ether on target for 0.075 BTC by June, up 10% versus current price levels. Meanwhile, the pair's upside target for April appears to be its 50-3D exponential moving average (50-3D EMA; the red wave) near 0.069 BTC.

Conversely, a decisive close below the 200-3D EMA (the blue wave) near 0.066 BTC, coinciding support/resistance level near 0.067 BTC, risks delaying or — in the worst case scenario — invalidating the bullish retracement setup.

This bearish argument echoes independent market analyst CrediBULL Crypto who expects strong selling pressure near the 0.067 BTC resistance level that would lead to a 50% drop in 2023.

ETH/BTC weekly price chart. Source: TradingView/CrediBULL Crypto

Ethereum vs. dollar outlook

The ETH/USD pair has rallied by more than 50% in 2023, primarily due to similar uptrends elsewhere in the crypto market.

A weakening dollar, lower U.S. Treasury yields, and expectations of a Federal Reserve pivot on interest rate hikes have helped cryptocurrencies rise across the board in Q1. These catalysts will likely remain in the spotlight until the Federal Open Market Committee (FOMC) meeting in May.

Shanghai bringing the first greenshoots of #AltcoinSeason ?$ETH is perking up to an 8 month high as we approach one week until the Shanghai fork update @ 10:27:35 PM UTC on the 12th (Epoch #620,9536) The rally has mostly been a Fed/USD rates story, causing BTC to lead the way.… pic.twitter.com/dI0bpywR16

— Rich Rosenblum (@Rich_GSR) April 4, 2023

As a result, Ether could sustain its yearly gains in April, consolidating inside the $1,800-2,000 range until the Fed decision.

Related: 3 key Ethereum price metrics cast doubt on the strength of ETH’s recent rally

Moreover, a decisive breakout at current levels could result in extended gains with a second-quarter ETH price target of over $3,000.

ETH/USD three-day price chart. Source: TradingView

On the other hand, the bears will attempt to pull the price down for a close below $1,800 with the triangle's lower trendline near $1,600 as its downside target.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

#ETH #Ethereum #crypto2023 #shanghai #crypto2023

On-chain analytics platform CryptoQuant is optimistic that Ethereum (ETH) will not come under severe selling pressure as feared following the Shanghai upgrade scheduled for next week.

CryptoQuant says that the Shanghai upgrade, which is expected to allow the unstaking of Ethereum on April 12th, is unlikely to trigger above-normal selling pressure.

According to CryptoQuant, the selling pressure is likely to be lower than feared due to the fact that most of the staked Ethereum is below the price it was bought at.

“There is an ongoing fear that the activation of withdrawals on April 12th with the Shanghai upgrade would bring more than usual selling pressure.

However, our profit and loss analysis shows otherwise.

With the current ETH prices, more than half of the staked ETH (9.7 million out of 17.9 million) is currently at a loss.

For the sole reason that the significant staked ETH is currently at a loss, we believe that the selling pressure will be lower than expected.”

Source: CryptoQuant/Twitter

CryptoQuant further says that a significant number of the Ethereum staked by the liquid staking solution Lido is also in the red.

“Also, it is worth noting that a significant portion of the deposits made by the Lido pool is currently underwater.”

Source: CryptoQuant/Twitter

According to Binance Research, there are over 16.5 million staked Ethereum, which is approximately 14% of the total supply.

Ethereum is trading at $1,867 at time of writing.

#ETH #Ethereum #shanghai #crypto2023 #Binance