All the attention on this particular update revolves around the withdrawal of Ethereum (ETH) tokens, which have been locked since the end of 2020, from staking.
Most Ethereum Stakers Are Losing
Some members of the crypto community believe that a massive price dump will follow as users dump their coins to make a profit. However, by the standards of the crypto market, this profit will be very modest. Imagine you staked ETH on December 1, 2020 when the asset was trading at $612. By selling it at the current price, you would have received a profit of 156%. Sounds good – but only if you do not take into account the enormous growth of some tokens, which we saw at the beginning of 2023.
In addition, most users have locked Ethereum in staking at a higher cost. According to Dune Analytics, at the moment, only 16% of the coins bring profit to their owners. If the Shanghai update had been activated today, they would have suffered some pretty serious losses.
Platforms Implement New ETH Staking Mechanisms
The bullish members of the crypto community also have a weighty argument. In their opinion, unlocking Ethereum after a three-year freeze will prove to users that staking does not carry significant risks and motivates them to use the possibilities of this tool for additional profit.
The same opinion is shared by the creators of decentralized finance (DeFi) platforms, which are introducing new staking mechanisms. Aave’s latest upgrade, for example, allows customers to deposit ETH into the Lido Finance protocol and receive stETH tokens, which they then use to borrow even more ETH on Aave. A similar tool will appear in Spark Lend, a product of MakerDAO engineers.
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