- Ethereum’s Shapella upgrade has been successfully executed
- Critics warned of a flood of ETH into the market, but no such event materialized
- Less than 4,000 validators queued up for ETH withdrawals prior to the upgrade
Ethereum’s Shapella upgrade has gone live, with fears that billions of dollars worth of ETH would be sold off proving to be unfounded. Even the unnerving spectacle of Ethereum developers singing campfire songs as the fork took place wasn’t enough to anger the crypto gods, as the upgrade went through successfully and stakers were able to get their hands on the first tranche of their staked ETH and rewards. The price of ETH barely flinched as the upgrade took place, showing that the fears didn’t even hit market sentiment.
ETH Flood Turns Out To Be a Trickle
The long-awaited Shapella upgrade took place just before 10:30 pm UTC yesterday at epoch number 194,048, with a total of 12,859 ETH unlocked in over 4,300 withdrawals. Critics warned that the unlocking of $24.6 million worth of tokens would result in a price crash, but none arrived, prompting some on Twitter to poke fun at the bears:
So I guess there weren’t billions of eth to be sold after shanghai
— Vance Spencer (@pythianism) April 12, 2023
Within the first few hours, around 45% of the 560,000 Ethereum validators are able to request a partial or full withdrawal, and with the majority of withdrawals initially ranging between 2.8 and 3.2 ETH it was clear that it was mostly staking rewards that were being withdrawn in the initial stages.
Hi Shapella 👋
Withdrawals have appeared! pic.twitter.com/POqeZwkZJ4
— Etherscan (@etherscan) April 12, 2023
The slow withdrawal uptake is explained by the fact that less than 3,996 validators were signed up to the exit queue in the moments before the Shapella hard fork took effect, showing that most were happy to hold their ETH, with the selling pressure likely to come in a bull market.
Control Measures in Place
Despite the value of the ETH in the Beacon Chain being $34.8 billion, the Ethereum Foundation has implemented several measures to prevent an overwhelming supply of ETH from entering the market. Estimates say that less than 1% of the 18.1 million ETH will be released during the first week, with the 12,859 ETH unlocked within the first hour after the fork representing just 0.07% of the total number of coins staked in the Beacon Chain.