The volume of staked ETH deposited was larger than the volume of withdrawals from the network for the first time since Ethereum’s Shanghai upgrade went live.
According to data from on-chain analytics firm Nansen, around 124,000 ETH was staked on April 17, exceeding the 64,800 ETH that was withdrawn.
Staked ETH deposits are now outpacing withdrawals
— tedtalksmacro (@tedtalksmacro) April 18, 2023
This is the first time deposits have flipped withdrawals since the Shanghai upgrade was activated on Ethereum, enabling validators to withdraw their staked ETH.
Many anticipated that this event could potentially lead to a mass exodus of validators from the network, which would in turn trigger a massive selloff for the second-largest cryptocurrency by market cap. With validators free to exit the network and sell their ETH on exchanges, a price move downward for the asset looked entirely on the cards.
Instead, ETH surged 10% in the 24 hours that followed the upgrade to a 10-month high of $2,126. While there has been an influx of around $375 million worth of ETH deposited on crypto exchanges over the last few days, its price has remained resilient. At the time of writing, ETH was trading at around $2,086.
Most of the staked ETH withdrawn has come from providers of liquid staking options like Lido, Binance, Kraken and Huobi.
Lido alone accounts for 25% of ETH withdrawals, meanwhile Kraken’s exit is tied to fulfilling its obligation to the U.S. Securities and Exchange Commission (SEC), which ordered the crypto exchange to end its staking service earlier this year.
Some market participants predicted that the era of staked ETH withdrawals would positively benefit the staking industry and incentivize more users to participate. To that end, decentralized staking service RocketPool has made it easier for users to become validators with the creation of 8-ETH bonded minipools.
“Minipools with only 8 ETH bonded by their owning node operator are matched with 24 ETH from the staking pool (provided by rETH holders) in order to make a validator. This significantly reduces the capital requirement for running your own validator and results in greater returns for both the node operator and the rETH stakers,” said RocketPool in a document overviewing its Atlas Upgrade.