Ethereum Staking Tokens Jump Double Digits as Shanghai Upgrade Gets a Date
The Shanghai and Capella upgrades, named Shapella, will activate around 6: 30 pm UTC on April 12, 2023, per the Ethereum Foundation’s latest note.
Crucially, this upgrade will let Ethereum stakers, including individuals and larger staking outfits, freely withdraw their ETH. Currently, that’s not possible.
The news boosted native tokens for staking projects like Lido DAO (LDO), Frax Shares (FXS), and Rocket Pool (RPL). The gains across these tokens surpassed Ethereum’s 5.5% rise over the last day, with LDO rising by 18.6%, RPL by 13.3%, and the FXS token by 20.4%, per CoinGecko.
Each of these protocols lets users deposit as much or as little Ethereum and participate in staking. Depositing directly on the mainnet demands a minimum of 32 ETH to participate. When users deposit into a staking project, they receive a “staked” version of Ethereum which accrues staking yield and acts as a receipt of their deposit.
Why Ethereum Bulls Are Turning to LSD
Once withdrawals are enabled, some analysts suggest that this may also reduce the risk of holding those staked versions of ETH, like Lido’s stETH and Frax’s frxETH, as they will finally be redeemable. The reduced risk could encourage more ETH holders to stake with LSD platforms for higher yields.
Lido DAO, the largest LSD entity with 31.5% of the total ETH deposits, already conducted withdrawals on the Goerli testnet yesterday.
🎉 Lido V2 is currently being tested on Goerli with the first successful withdrawal already confirmed 🎉https://t.co/8NcTklCmjU
Here's what to expect from the Goerli V2 Testnet 🧵👇
— Lido (@LidoFinance) March 28, 2023
The newest upgrade comes after Ethereum’s merge event in September 2022, when the blockchain shifted to a proof-of-stake (PoS) consensus mechanism.
This time, the Shapella upgrade will enable ETH withdrawals for various users who staked their Ethereum on the network as early as December 2020.
Today, there are more than 16.3 million Ethereum staked on the network.