ETH withdrawals on the Ethereum Consensus Layer could be available by March 2023 after the Shanghai hard fork.

Ethereum holders and investors who have staked their ETH on the Consensus layer deposit contract could have the ability to withdraw their funds by March 2023. This is after developers of the Ethereum network agreed on Thursday that the network’s next upgrade, known as ‘Shanghai’, should be released by the first quarter of next year.

Shanghai Upgrade to Include EIP-4895

The Shanghai Upgrade will include EIP-4895 which will initiate the process of withdrawals on the Ethereum beacon chain. The EIP is designed to provide a means for validator withdrawals on the beacon chain to enter into the Ethereum Virtual machine.

Ethereum Deposit Contract Holds 15.5M ETH Worth $19.48 Billion

Data from Etherscan shows that the Ethereum deposit contract currently holds 15.572 million ETH, valued at an estimated $19.48 billion.

All the Ethereum Will Not Be Available for Withdrawal at Once

The massive amount of Ethereum locked in the deposit contract automatically brings to mind the possibility of all that ETH being dumped into the open market once withdrawals are enabled.

However, this is not the case. Once the Shanghai upgrade is implemented, full validator exits will be rate limited by the protocol. Only six validators will be allowed to exit staking per epoch, which is every 6.4 minutes. This means that only an estimated 43,200 ETH will be withdrawable daily out of the 15.572 million highlighted above.

Further doing the math, it would take roughly 360 days to withdraw all the ETH from the staking contract. But such a scenario is improbable as validators staking ETH are at the core of Ethereum’s operations and security as a proof-of-stake network.

Traders Can Now Bet on the Amount of Daily ETH Staking Rates

In other news, the popular derivatives trading platform Bitmex launched the first-ever ETH staking yield swap (ETHYLD), which allows traders to ‘trade and speculate on daily ETH staking rates, with up to 2x leverage.’

The new derivative product will allow Bitmex users to take positions on the value of ETH rewards received daily by validators.

~By John P. Njui~