Ethereum developers will soon implement the Shapella upgrade, allowing validators on the Ethereum network to withdraw their accumulated rewards.
The current value of the accumulated prefers $2 billion based on current values. This upgrade marks a significant milestone for validators waiting for this option.
Since late 2020, when the largest altcoin blockchain introduced its staking smart contract on the beacon chain layer, validators, regular depositors, and other entities have stockpiled about 18 million ETH.
The Shanghai-Capella update will allow access to this stockpile. In other words, the update will unlock the previously inaccessible 18 million ETH.
As indicated by on-chain data, validators on the Ethereum network have been waiting for over two years to withdraw their rewards.
The total amount of ETH that validators can withdraw is 1.1 million. Following Shapella’s unlocking of $35 billion worth of staked ETH, validators can withdraw their rewards either partially or in full.
Validators with the ‘0x01’ withdrawal credential will receive partial withdrawals automatically. According to a Glassnode report, out of more than 500,000 validators, only 44% have registered to receive automatic partial withdrawals.
As Ethereum produces each block, up to 16 validators will receive automatic withdrawals every 12 seconds. They will distribute these withdrawals for five days to ensure that the validator balance of 32 ETH remains constant.
Withdrawal Limits And Mass Exodus Prevention
Withdrawing completely entails exiting both Shapella and Ethereum’s proof-of-stake network. One thousand eight hundred validators can withdraw a maximum of 57,600 ETH daily.
The network permits daily withdrawal of unstaked ETH worth around $109 million. The developers have set this limit to prevent a large-scale departure of validators. The aim is to reduce the effect of extensive unstaking on the network.
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Currently, there are nearly 4,000 validators who are awaiting to leave Shapella, holding approximately 141,000 ETH. Once Shapella is launched to Ethereum’s mainnet, approximately $2.6 billion worth of 1.4 million ETH should become available in a few days.