The Shanghai upgrade was one of the most anticipated blockchain events of 2023, which is expected to bring a higher level of speed and scalability to the Ethereum network.
However, the main feature of the Shanghai upgrade was that validators and stakers could finally withdraw their staked ETH from the Ethereum Beacon Chain.
In explanation, the Beacon Chain was created to facilitate Ethereum’s smooth transition 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 staked their ETH tokens on the Beacon chain to facilitate network security and earn rewards. Although those assets and the rewards they generate were only accessible after the Shanghai upgrade in 2023.
Prior to this network upgrade, which took place on April 12, 2023, the total amount of ETH deployed was 18.1 million, according to data by Dune Analytics.
Four months later, token analysis website Token Unlocks has provided more insight into how the Shanghai upgrade has impacted ETH staking activity so far.
Shanghai Upgrade Instills Confidence in ETH Staking
Token will be unlocked on August 10th Posted on social media platform X that the Ethereum Shanghai upgrade has delivered a positive result on ETH staking, with a significant increase in demand for LSD protocols – a liquid staking aggregator project designed to maximize returns for ETH stakers promote.
🔥 Packed for Shanghai Upgrade 🔥
The Shanghai Upgrade has fueled industry growth and demand for the LSD protocol continues to rise.
Here’s what you shouldn’t miss:
🔐 22.99m $ETH staked, ~18.86% of circulation (total)
✅ 5.84m $ETH deployed, ~4.8% of circulation (since… pic.twitter.com/ZReOpNVTzD— Token Unlocks (@Token_Unlocks) August 10, 2023
According to the Token Unlocks report, there are currently 22.99 million ETH wagered on the Ethereum network, accounting for approximately 18.86% of the circulating supply of ETH.
The report also highlights that 25% of this currently deployed ETH was deployed after the Shanghai upgrade in April. This means that about 5.84 million ETH has been wagered in the past four months, which makes up about 4.8% of the circulating supply of ETH.
Highlighting the impact of the Shanghai upgrade on ETH staking, Token Unlocks noted that the net ETH staking ratio is up 147%, with about 9.82 million ETH deposited and only 3.97 million ETH withdrawn after the update.
It is worth mentioning that there were some speculations that the Shanghai upgrade would lead to a large-scale pullback of ETH, which could negatively impact the crypto market.
Interestingly, the above report 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 Tighten Grip on Coin Supply
In other news, on-chain analytics company Santiment reports a trend of wealth accumulation in the ETH market. According to Santiment, the top 10 ETH addresses have significantly increased their ETH holdings over the past five years.
Within this period, the market research firm notes that these wallets acquired 27.86 million ETH, increasing their holdings from 11.2% to 34.6% of the token’s supply.
Related reading: Ethereum price prints bullish technical pattern, why close above $1,880 is critical
At the time of writing, ETH is trading at $1,855.86, down 0.68% in the last 24 hours based on data from CoinMarketCap. With a market cap of $222.18 billion, Ethereum’s native token remains the second largest cryptocurrency in the market.