The latest report on Ethereum states that the next Ethereum upgrade, according to IntoTheBlock: a blockchain analytics company, would benefit owners—but with a catch that will cost almost $34 billion. On 12th April 2023, about 850 days after depositors starts locking ETH into the deposit contract, the upgrade, also known as Ethereum Improvement Proposal (EIP)-4895, is expected to allow validators to withdraw a portion of the staked money.
Long-term gains for holders of ETH are anticipated from the upgrade, but the short-term could be unpredictable due to the selling and withdrawal of some locked ETH. A brief supply shock from the withdrawal of locked ETH can cause price swings.
It was gathered that the total sum of $34 billion worth of ETH has been secured in the Ethereum 2.0 deposit contract. Validators have been staking their ETH to help protect the network and start earning for the past two years, which has led to the accumulation of this sum.
There are steps to take part in staking. According to information available to the public, validators must lock up a minimum of 32 ETH, and in exchange for their work, they receive new ETH. However, until the network is appropriately updated, the staked ETH has been locked in the deposit contract and cannot be withdrawn or sold.
More Activities On The Scheduled Date Of The New Upgrade
On 12th April 2023, validators will be permitted to begin the process of withdrawing some of the staked money with them to EIP-4895. This will be a key turning point for the Ethereum network, considering the fact that this is the first time that gambled ETH can be withdrawn and traded.
According to a statement by IntoTheBlock, the planned update will benefit ETH owners in the long run since it will boost the amount of ETH available on the market and create a more competitive market. Also, a larger supply of ETH might result in lower prices, drawing more buyers to the market.
However, the short term may be unstable as price changes may result from the selling and withdrawing of some trapped ETH. It was predicted that there may be some short-term volatility, holders should be optimistic about the long-term advantages of upgrading.
Recent years have seen substantial improvements to the Ethereum network as it switches from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus protocol. The PoS technique, which replaces the PoW mechanism employed by Bitcoin and other cryptocurrencies, is intended to be more secure and energy-efficient.
Analysts have explained that switching to PoS has been a significant turning point for the Ethereum network because it has improved efficiency and security. Meanwhile, at the time of this report, more validators have joined the network due to the upgrade.