Coinbase will be activated 24 hours after Shanghai

Coinbase will allow customers of its ETH staking program to unstake their assets 24 hours after ETH developers activate the Shepela fork on the Ethereum mainnet.

The exchange said that the protocol will control the waiting time for ETH rewards to be paid out, making the ETA of funds unpredictable. It added that withdrawal requests can take months to complete.

ETH developers limit withdrawals to keep network secure

To withdraw funds validators must join the exit queue. The churn limit controls the number of users exiting the network to avoid mass migrations that destabilize the network.

Once validators exit the queue, they enter a withdrawal period that can last for weeks or months.

Ethereum developers impose a limit of 57,600 withdrawals per day. Validators wishing to withdraw all their staked funds will face long waiting periods.

Ethereum developer Tim Beiko announced yesterday that the Shepela fork took place on the Goerly public testnet. Goerly is the last dress rehearsal before Schapella goes live on the main Ethereum network, enabling the withdrawal of staked ETH.

Goerly is a multi-purpose environment that client developers, application developers, and node operators can use to test changes before sending them to the mainnet.

The Shepela deployment, also known as Shanghai, is expected to happen in early April 2023 on the Ethereum mainnet.

Most Stackers Will Lose When Shepela Launches

The developers changed Ethereum’s consensus mechanism from proof-of-work to proof-of-stake on September 15, 2022.

Entities wishing to secure the new Ethereum network can send 32 ETH to the new Consensus Network on a staking contract. Those who are unable or unwilling to send 32 ETH can join a Liquid Staking protocol like Lido and receive Derivative Liquidity Tokens for each ETH staked. Users can earn ETH rewards for depositing on the platform in each case.

The developers opened the new consensus layer, Beacon Chain, to the public on December 1st, 2020.

Currently, validators have staked over $17 million in ETH on the Beacon chain.

Top ETH Stackers
ETH stakers in descending order of ETH stakes | Source: Dune Analytics

Liquid staking protocol Lido has approximately 5.5 billion ETH staked, while Coinbase customers have staked 2 billion ETH on the platform.

ETH stakers in profit
ETH stackers in profit | Source: Dune Analytics

Roughly 60% of depositors are in the red, ie, ETH deposited in the Beacon chain is now worth more ETH than when they deposited it. If they withdraw their ETH after the mainnet upgrade, the rest will be at a loss.

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