BlocksInform
Ethereum network is set for a major upgrade in March. Nicknamed Shanghai, the upgrade will finally come out on the tag string.
Known as Shanghai, the upgrade will finally free ETH staked on the Beacon chain. However, it will not happen simultaneously due to network security concerns.
Shanghai upgrade will implement (Ethereum Improvement Proposal) 4895. However, this will not occur at the same time because of network safety issues.
The Ethereum Improvement Proposal (4895) will be implemented.
This is the first time that the consensus layer has been removed since December 2020. This allows for withdrawals from the consensus layer for the first time since December 2020, January 13th, blockworks research 'westie' itemised the process involving an exit queue:the shanghai upgrade for ethereum is currently targeted for this march.
This will make it possible to proceed with staking withdrawals for the first time since people started staking in 2020.
I'll walk you through it step by step ????
— Westie ?? (@WestieCapital) January 12, 2023
I'll give you a step-by-step explanation???—
Westie ?? (@WestieCapital) 12January 2023. Let me take you through this step by step...westie?? (@westiecapital) on January 12, 2023ethereum exit queuethe ethereum removal period is dynamic and depends on the number of validators coming out at that point.
In addition, validators are required to complete a two-step withdrawal process: an exit queue and a withdrawal time. There are a few different settings that set the output queue. Two of them are the total number of validators and what is referred to as a turnover limit.
The rotation limit is a mechanism which guarantees the stability and safety of the network. The rotation limit determines the number of validators able to quit completely by time or 32 blocks.
With an estimate of half a million validators, the researcher stated that the rollover limit would be around 7. Furthermore, the rollover limit increases by one for every 65,536 validators. Once a validator has crossed the output queue set by the rollover limit, they enter a withdrawal period.
It is estimated that this is approximately 27 hours for validators who are not subject to reductions. However, the timing is entirely dependent on the number of validators who wish to complete an exit.
The researcher concluded that it is difficult to predict as we don’t know how many of the 498,925 active validators intend to fully exit their staked positions.
“The researcher concluded that it is difficult to make predictions because we do not know how many of the 498,925 active validators intend to completely withdraw from their positions in play. The researcher has come to the conclusion that forecasting is difficult as we are not sure how many of the 498,925 active validators intend to withdraw completely from their staked positions." as what to expect in the post-shanghai withdrawal period, That's kind of hard.”
Liquid Staking Momentum
A portion of Ethereum stakers will likely switch to liquid staking platforms for better yield opportunities. Inliquid staking momentuma part of the ethereum issues will probably move to liquid staking platforms for better performance opportunities.
Liquid staking platforms such as Lido have been performing well recently purely due to this new narrative. Furthermore, the amount of ETH staked has just reached a milestone of 16 million, valued at approximately $22.5 billion.
