Unlocking of ETHs: A Closer Look at the Upcoming Shanghai Hard Fork

04/12/2023 05:46 • Metaverse Matters • 130 views

On April 12th, Glassnode predicted in a report on April 11th that out of the 18.1 million ETHs on the beacon chain in the first week of Shanghai’s hard fork execution on Ethereum, an estimated 170000 ETHs will be unlocked, accounting for less than 1%. This number includes a pledge reward worth 100000 ETHs (worth $190 million) and a pledge ETH worth 70000 ETHs (worth $133 million).

Glassnode: It is expected that less than 1% of the pledged ETH will be unlocked after the upgrade of Ethereum Shanghai

If you’re an avid Ethereum follower, you’ll know that the upcoming Shanghai hard fork execution is big news. It’s set to bring about a number of changes to the network, including a new and improved version of Ethereum that promises to address some of the scalability issues that have plagued the network in the past.
But one of the lesser-known aspects of this hard fork is the unlocking of ETHs that will take place in the first week of its execution. According to Glassnode’s report on April 11th, an estimated 170,000 ETHs will be unlocked out of the 18.1 million ETHs on the beacon chain. This accounts for less than 1% of the total number of ETHs on Ethereum.

What is the unlocking of ETHs?

Before we dive deeper into what this means, let’s first discuss what we mean by the unlocking of ETHs. Essentially, this refers to the process of releasing ETHs that were previously locked up in Ethereum 2.0. These ETHs were locked up as part of the staking process, which involves holding a certain amount of ETHs as collateral in order to validate transactions and secure the network.
With the upcoming hard fork, certain ETHs that were previously locked up will be released back into circulation. This includes a pledge reward worth 100,000 ETHs (worth $190 million) and a pledge ETH worth 70,000 ETHs (worth $133 million).

Why is it significant?

At first glance, the unlocking of 170,000 ETHs might not seem like a big deal. After all, it’s a relatively small percentage of the total number of ETHs on the network. But when you consider the amount of value that will be released back into circulation, it becomes clear that this will have a significant impact on the Ethereum ecosystem.
For one thing, the sudden influx of these unlocked ETHs could potentially lead to a drop in the price of ETH. This is because there will be more supply on the market, which could cause a dip in demand. Of course, this isn’t a given – the price of ETH is influenced by a number of factors – but it’s certainly something to keep an eye on.
Additionally, the unlocking of these ETHs could have implications for the Ethereum 2.0 staking process. As more and more ETHs are unlocked and released back into circulation, it becomes increasingly important for validators to stake their ETHs in order to secure the network. This could lead to increased competition for staking rewards, which could, in turn, lead to higher staking yields.

The Bottom Line

The unlocking of 170,000 ETHs might not sound like a big deal on the surface, but it’s actually a significant development for the Ethereum ecosystem. It will have implications for the price of ETH as well as the staking process, and it’s something that Ethereum enthusiasts should keep an eye on in the coming weeks and months.

FAQs

Q: What is a hard fork?
A: A hard fork is a change to the underlying software of a blockchain, which results in a split of the network. This can be done for a number of reasons, such as to fix bugs, add new features, or address scalability issues.
Q: How do I stake my ETHs?
A: To stake your ETHs and become a validator on Ethereum 2.0, you’ll need to follow a few steps. First, you’ll need to set up an Ethereum 2.0 node and deposit your ETHs into the deposit contract. From there, you’ll need to run your validator and start earning staking rewards.
Q: Will the unlocking of ETHs affect the price of other cryptocurrencies?
A: It’s possible that the unlocking of ETHs could have a ripple effect on other cryptocurrencies, particularly those that are closely tied to Ethereum. However, it’s difficult to predict exactly how and to what extent this will happen.

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