Should we expect Ethereum mass withdrawals?


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The main crypto news is the closure of the top tier banks, which suggests the risk of a significant financial crisis. In the wake of this dramatic news, the crypto arena continues to march forward. Therefore, the developers continue to work on their project and the network updates follow each other. For example, the Ethereum blockchain, the second largest in the world, is about to implement its Shapella update. This will have a very significant impact on the implementation of ETH coins. Find out why.

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What is Shapella Update?

Let’s take a quick look at the Ethereum roadmap. You may know that the network welcomed one of its biggest updates in 2022. This event was called “Merge” (“Fusion” in French). Simply put, Ethereum is he changed his consensus protocol. He abandoned the Proof-Off-Work (POW) model as used on Bitcoin to adopt Proof-Of-Stake (POS). The reason? POS is a much lower energy model than POW. For an overview of Ethereum since this update, check out our article on this topic.

A few days ago, another update has just been rolled out to testnet and is in its final stages of development. The update is expected to arrive officially in April. It is given shape. Before going further, a semantic point is in order. In fact, the upgrade in question is better known Shanghai. So why talk about Shapella now?

In fact, you should know that the Ethereum blockchain has two layers. There is an execution layer (the main one) and a consensus layer (also called a beacon chain). To be precise, Shanghai belongs to the runtime layer. The similar update is given for the other layer Capella. To talk about this update in a global sense, the developers have made a clever contraction of the two names to give birth to… shape (Shanghai + Capella).

But then what is Shapella’s upgrade? One of the biggest changes made is to ETH coin stacking.

Big withdrawals of ETH coins at stake?

With the advent of “Merge”, Ethereum operates on a Proof of Stake protocol as explained above. This changes the way to participate in block validation. With the POS, users who pledge ETH (from a certain amount) participate in the validation of the blocks. This allows them to be rewarded through transaction fees in particular. On the other hand, should know that the coins bet are blocked.

Precisely, the Shapella update will change that. In fact, with it, users they will now be able to remove their corners block until now. Therefore, some are waiting for requests for mass withdrawal (“unstaking”). This is the case with the Coinbase exchange, which has already warned on Twitter that withdrawal requests will take “weeks or even months”.

As an interim solution, Coinbase will allow users to trade previously pledged ETH coins until they can be withdrawn.

“Unexpected requests will be available to all Coinbase customers at the same time and will be forwarded to the Ethereum protocol and queued based on when they are received. » Coinbase

Source: Twitter

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