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

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#eth2.0 #hongkongweb3festival2023 #cpi #shanghai

Ether’s (ETH) fresh rally above $2,000 after the successful Shanghai upgrade late Wednesday, dropped bitcoin’s (BTC) dominance from an almost two-year record high, according to TradingView data.

BTC’s dominance rate rose to as high as 49.06% early Wednesday, according to TradingView data, before retreating to 48.12% as ETH’s price rose. The last time the metric was around the 49% level happened in July 2021, some 21 months ago, TradingView shows.

ETH dominance, on the other hand, surged to 19.87% on Thursday, marking a one-month high.

The BTC dominance rate is the BTC market capitalization’s share of the total market cap of the cryptocurrency market. The metric is important to assess the relative strength of BTC, the largest cryptocurrency by market value, compared to the broader crypto market, or identify periods when altcoins outperform, also known as an altcoin season. Ether dominance, similarly shows the second largest cryptocurrency’s relative value to the crypto market.

Ether’s improved performance has reduced bitcoin’s share of the crypto market. The shift has come after the Ethereum network’s long-awaited tech upgrade, also called Shanghai or Shapella, was deployed without a hitch late Wednesday.

The upgrade enabled the withdrawal of more than 17.4 million of staked tokens, worth some $35 billion, from Ethereum’s proof-of-stake blockchain for the first time since its launch in December 2020. Its successful deployment eliminated a slight but concerning f risk that ETH investors might not be able to reclaim their tokens locked up in staking contracts..

ETH rose as high as $2,023 on Thursday, gaining 5% in the past 24 hours, according to CoinDesk data, leading the upswing of the broader crypto prices.BTC, which also reacted positively to the upgrade, is only up 1.5% through the day, lagging behind altcoins.

#ETH #BTC #shanghai #Binance #crypto2023

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

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

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