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:
— 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noted that the net ETH staking ratio is up by 147%, with about 9.82 million ETH deposited and only 3.97 million ETH withdrawn post-upgrade.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.