Report: “Shanghai Update Will Bring More Funds To Blockchain”

JPMorgan has announced that it predicts more investors will invest in the crypto fund with the Shanghai upgrade. JPMorgan states that it believes this number could reach 60% of issued ETH. This number has already been staked in other Blockchain networks. The report published by JPMorgan reveals that the update, which is scheduled to be implemented in Shanghai in March, could bring more capital to the network. The investment bank estimates that Shanghai will bring Ethereum’s share percentage more than four times the number of other popular proof-of-stake networks, currently staked ether. The information in the report is as follows:

“Assuming that the staking rate has approached an average of 60% of other major networks over time, the number of validators could go from $0.5 million to $2.2 million and the annual return in ETH could fall from 7.4% today to about 5%.”

14% of the Ethereum issuance is currently staked and cannot be undone until the Shanghai update is finally implemented. According to data from staking rewards, other protocols like Solana and Cardano are staking around 70% of their issuance.

The report also detailed the fate of these new funds, which they predict will be staked by new investors. The firm believes that most of these funds will go to platforms like Lido, which offer several advantages over maintaining hardware infrastructure. The report states that these platforms “provide an equal amount of derivative Tokens in exchange for tradable ETH, providing liquidity to staking assets that would otherwise be locked into staking contracts.”

JPMorgan’s report recommends that these derivative tokens be positioned across different decentralized finance platforms to consolidate earnings by staking as well. It also allows small traders to participate in protocol validation tasks in staking pools, making it easy to bypass the minimum 32 ETH staking requirement.