In the lead up to last month’s Shapella updates, many crypto experts speculated that triggering staked Ether withdrawals could drive the price of the native asset lower.
But the most recent data suggests that the post-retirement selling pressure on ETH “has been something of a non-event.” This is supported by the fact that deposits have almost equaled the amount of ETH coming into circulation.
Ethereum State: Post Shapella
The Shapella implementation was crucial as it enabled withdrawals of staked ETH from Beacon Chain for the first time. However, the event also raised concerns about ETH entering circulation without participation, which could lead to sustained selling pressure. The bullish outlook, on the other hand, argued that the risk of not being able to withdraw is eliminated, resulting in more deposits.
According to Nansen’s recent report who analyzed the post-Shapella state of Ethereum, noted that removing the risks of non-participation has so far offset the selling pressure of withdrawals. To top it off, a significant proportion of the ETH withdrawn is likely not intended for sale.
The report stated that the update had a net zero impact on ETH staked.
“There are 19.3 million ETH, including rewards, on the Beacon Chain today, equivalent to the amount of ETH on the Beacon Chain during the time of the Shapella update, which means it has had zero net impact on the network until now”.
Withdrawal requests were dominated by centralized crypto exchanges. Kraken, for its part, leads with its withdrawal volume accounting for more than 26% of all ETH withdrawals since the update. This is likely related to the recent regulatory crackdown on the US-based exchange’s staking service, which has forced it to return staked ETH to depositors on its platform.
“Other notable top ETH withdrawers include Binance, Coinbase, and Private Transactions Miner: 0xffd, with 13.3%, 12.5%, and 5.44% of the Principal ETH portion withdrawn, respectively.” – says the report.
One month after the update, withdrawals have slowed considerably and Nansen’s data suggests that most banks are currently holding on to their remaining balance for now. Entities like Lido, Binance, Coinbase, Kiln, and Stakefish represent deposits of over a million Ether over the past month.
Behavior of Withdrawals
Nansen reported that nearly 73% of the ETH withdrawn from Beacon Chain so far has been sent to centralized exchanges. But, most of this is CEX withdrawing ETH for themselves, indicating that most of the tokens being sent to these entities are not intended for sale. Instead, these tokens are for the internal operations of the exchange.
By contrast, the amount of ETH sent to decentralized exchanges from withdrawals only accounts for 1.23% of the total share. About 20% of ETH withdrawn was found to have been sent to all miscellaneous addresses that are not labeled CEX, DEX, Staking, or DeFi, according to Nansen, and about 6% of all ETH withdrawn was sent for redoing. stake.
Nansen believes this cohort is less likely to profit as they are still running validation nodes and staking rewards are processed automatically. Therefore, some ETH from partial withdrawals would return to the Beacon Chain for more returns.
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