In March this year, the Shanghai upgrade is scheduled for the Ethereum (ETH) network, which, in addition to enhancement proposals and network enhancements, will allow the withdrawal of staked ether from the staking contracts. Since the launch of the Beacon Chain at the end of 2020, it has been possible to send ETH to a staking contract, but until now it has not been possible to withdraw it again.
Binance, the largest crypto exchange in the world, was leading up to this major upgrade research to the percentage of staked ethereum which is in green against the current ethereum price.
Staked ETH in green
A total of 16.7 million ETH will be staked, which is worth approximately $28 billion at the time of writing. Of these, 31% would currently be in the green and logically 69% in the loss. A loss here means that the current market price of ethereum is lower than the price when investors chose to send their ETH to the staking contract.
However, according to Binance’s research, those underwater have little reason to liquidate their holdings after the Shanghai upgrade.
About 2 million ETH was staked from the first time this was possible, so from the end of December 2020. At the time the ethereum price was around $600, so this part is all in the green.
ETH staking withdrawals
With the Shanghai upgrade, it will not be possible to withdraw all staked Ethereum from the staking contracts at once. However, the total staking reward earned can be withdrawn in one go. According to Binance, the total staking rewards amount to 1.03 million ETH or $1.7 billion.
Full exits are limited by the protocol: at the current level of active validators (approximately 520,000) it will be for 7 validators per epoch be able to withdraw all his/her staked ETH. This means that a maximum of 1,575 validators per day could throw in the towel, equating to a maximum of 50,400 ETH, or $83 million, in selling pressure per day.