Ethereum’s Shapella Upgrade Goes Live

After the Merge update on the Ethereum network last year, another highly anticipated update, Shapella, went live without any problems. The network update took place on the mainnet at period #620.9536, and Ethereum Improvement recommendation (EIP) 4895 was deployed, making ETHs that validators have staked on the network for a long time can be withdrawn. In addition to the withdrawal mechanism, the network’s commission fee, gas fees, has been optimized for certain transactions.

The release of withdrawal of assets locked in the network is perceived positively as Ethereum users will gain flexibility in asset management. It is also thought that unlocking staked assets could lead to increased volatility in the Ethereum market. However, it is widely believed that the fact that 18 million ETH of approximately $33 billion will not be released in one go may reduce a possible increase in volatility.

Speculation on how the update will affect the Ethereum market includes that the price at the time the majority of users locked their ETH holdings was above the current price, so that the released assets are less likely to be sold. While this view is gaining weight, most investors do not expect sharp drops in Ethereum price. It was reported that in the first hours after the withdrawals were activated, the net outflows were on average 10,000 ETH, while 0.3% of the total 18.1 million ETH staked at the moment was unlocked. In the time zone where the update took place, ETH price managed to find support in the $ 1,900 region after moving to the downside. Then, rising $1,920, ETH continues to move in the narrow band in the $1,900 – $1,920 range.