Shanghai Upgrade Drives 25% Boost In ETH Staking Activity

Semilore Faleti

1 year ago

3 mins read

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The Shanghai upgrade was one of the most anticipated blockchain events of 2023, expected to introduce a higher level of speed and scalability to the Ethereum network.

However, the most important feature of the Shanghai upgrade was allowing validators and stakers to finally withdraw their staked ETH from the Ethereum Beacon Chain.

To explain, the Beacon Chain was created to aid the smooth transition of Ethereum from a Proof-of-Work consensus model to a Proof-of-Stake mechanism, i.e., ETH 2.0. Since its launch in 2020, many users have been staking their ETH tokens on the Beacon chain to facilitate network security and earn rewards. Albeit, those assets and the rewards they generate were inaccessible until after the Shanghai upgrade in 2023.

Prior to this network upgrade which occurred on April 12, 2023, the total number of staked ETH stood at 18.1 million, according to data by Dune Analytics.

Four months later, the token analytics website Token Unlocks has offered more insight into how the Shanghai Upgrade has impacted the ETH staking activity so far.

Shanghai Upgrade Sparks Confidence In ETH Staking

On August 10, Token Unlocks posted on social media platform X that the Ethereum Shanghai upgrade has yielded a positive result on ETH staking, with a significant rise in demand for LSD protocols – a liquid staking aggregator project designed to promote maximum yields for ETH stakers.

🔥 Wrapped Up for Shanghai Upgrade 🔥

The Shanghai Upgrade fueled sector growth, and the demand for the LSD protocol keeps rising.

Here’s what you can’t afford to miss:

🔐 22.99m $ETH staked, ~18.86% of circulation (Overall)
✅ 5.84m $ETH staked, ~4.8% of circulation (Since… pic.twitter.com/ZReOpNVTzD

— Token Unlocks (@Token_Unlocks) August 10, 2023

According to the report by Token Unlocks, there are currently 22.99 million staked ETH on the Ethereum network, accounting for about 18.86% of ETH’s circulating supply.

The report also highlights that 25% of this currently staked ETH was staked after the Shanghai upgrade in April. This means that about 5.84 million ETH, constituting about 4.8% of ETH circulating supply, has been staked in the last four months.

To emphasize the impact of the Shanghai upgrade on ETH staking, Token Unlocks noted that the net ETH staking ratio is up by 147%, with about 9.82 million ETH deposited and only 3.97 million ETH withdrawn post-upgrade.

It is worth stating that there were some speculations that the Shanghai upgrade would lead to a large-scale withdrawal of ETH, which could negatively affect the crypto market.

Interestingly, the report above paints a different reality, with many users now willing to stake ETH as they have the freedom to withdraw at will.

ETH trading at $1,856.8 on the hourly chart | Source: ETHUSD chart on Tradingview.com

ETH Elites Strengthen Grip On Coin Supply

In other news, on-chain analytics firm Santiment reports a wealth accumulation trend in the ETH market. According to Santiment, the top 10 ETH addresses have significantly increased their ETH holdings in the last five years.

Within this period, the market intelligence firm notes that these wallets have acquired 27.86 million ETH, increasing their holdings from 11.2% to 34.6% of the token’s supply.

At the time of writing, ETH is trading at $1,855.86, with a 0.68% decline in the last 24 hours based on data from CoinMarketCap. With a market cap of $222.18 billion, the Ethereum native token remains the 2nd largest cryptocurrency in the market.

Featured image from Finbold, chart from Tradingview.

Semilore Faleti

Semilore Faleti is a cryptocurrency writer specialized in the field of journalism and content creation. While he started out writing on several subjects, Semilore soon found a knack for cracking down on the complexities and intricacies in the intriguing world of blockchains and cryptocurrency.

Semilore is drawn to the efficiency of digital assets in terms of storing, and transferring value. He is a staunch advocate for the adoption of cryptocurrency as he believes it can improve the digitalization and transparency of the existing financial systems.

In two years of active crypto writing, Semilore has covered multiple aspects of the digital asset space including blockchains, decentralized finance (DeFi), staking, non-fungible tokens (NFT), regulations and network upgrades among others.

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Currently at NewsBTC, Semilore is dedicated to reporting the latest news on cryptocurrency price action, on-chain developments and whale activity. He also covers the latest token analysis and price predictions by top market experts thus providing readers with potentially insightful and actionable information.

Through his meticulous research and engaging writing style, Semilore strives to establish himself as a trusted source in the crypto journalism field to inform and educate his audience on the latest trends and developments in the rapidly evolving world of digital assets.

Outside his work, Semilore possesses other passions like all individuals. He is a big music fan with an interest in almost every genre. He can be described as a “music nomad” always ready to listen to new artists and explore new trends.

Semilore Faleti is also a strong advocate for social justice, preaching fairness, inclusivity, and equity. He actively promotes the engagement of issues centred around systemic inequalities and all forms of discrimination.

He also promotes political participation by all persons at all levels. He believes active contribution to governmental systems and policies is the fastest and most effective way to bring about permanent positive change in any society.

In conclusion, Semilore Faleti exemplifies the convergence of expertise, passion, and advocacy in the world of crypto journalism. He is a rare individual whose work in documenting the evolution of cryptocurrency will remain relevant for years to come.

His dedication to demystifying digital assets and advocating for their adoption, combined with his commitment to social justice and political engagement, positions him as a dynamic and influential voice in the industry.

Whether through his meticulous reporting at NewsBTC or his fervent promotion of fairness and equity, Semilore continues to inform, educate, and inspire his audience, striving for a more transparent and inclusive financial future.

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