• Ethereum recently upgraded to a Proof-of-Stake consensus mechanism in September 2022.
• Stakers can earn rewards by depositing 32 ETH into the staking contract.
• Data from K33 Research revealed that nearly 1.5 million ETH ($2.8 billion) has been withdrawn since the Shanghai upgrade on 12 April 2023.
Ethereum Transitions to PoS Consensus Mechanism
In September 2022, Ethereum finally switched towards a Proof-of-Stake (PoS) consensus mechanism. This system allows for consensus to be met through stakers and not miners. Any individual can become a staker simply by depositing 32 ETH into the staking contract and earning rewards in return.
Shanghai Upgrade Allows Withdrawal of Staking Rewards
The mainnet transitioned to this PoS system in September 2022, although the staking contract had already been live on a test blockchain since November 2020; however, until the recent Shanghai upgrade, holders were unable to withdraw their coins from the contract and all rewards had been accumulating with validators due to this limitation. The Shanghai upgrade launched earlier this month allowed investors to withdraw their locked ETH and staking rewards, leading to an influx of withdrawals once this restriction was lifted.
Data Reveals Nearly 80% of Staking Rewards Withdrawn
K33 Research (formerly Arcane Research) released data showing that nearly 1.5 million ETH ($2.8 billion) has been withdrawn since 12 April 2023 when the hard fork occurred – making up nearly 80% of all staking rewards available in total since then. Out of these withdrawals, only one third involved complete exit from the 32 ETH stack originally deposited into the contract at the beginning; two thirds involved only withdrawal of staking rewards earned over time without affecting original stack size or validity as a validator.
Pie Chart Shows Division Between Full & Reward-Only Withdrawals
The pie chart below shows these withdrawals’ division between full and reward-only ones:
Conclusion
The Ethereum Shanghai upgrade allowed holders to withdraw their previously locked tokens and accrue any associated rewards they may have earned before its launch – resulting in nearly 1.5 million ETH being withdrawn within just a few weeks after its introduction according to K33 Research’s analysis!