By George Ward
The long-awaited Shanghai upgrade on the Ethereum network went live on April 13, allowing users with staked Ether to start unstaking their tokens. Kraken is reportedly leading the race, with the crypto exchange having 62% of validators that want to unstake their tokens.
Given its recent issues with the US financial watchdog, Kraken’s validator dominance is unsurprising.
Kraken Lead with 62% Exit Queue
According to the on-chain data platform, Rated Network Explorer, Kraken is leading with 62% of the total validators moving to unstake their Ether. Parsec Finance’s exit queue breakdown shows that the number of validators on the exchange has surpassed the 15,000 mark at the time of writing.
Unsurprisingly, Kraken dominates the Ether unstaking move because it faces legal issues with the United States Securities and Exchange Commission (SEC). In February, the regulator alleged that crypto exchanges staking offerings qualified as unregistered securities.
According to the SEC press release, Kraken admitted that its staking offerings are an investment that benefits investors, as the program earns yields through the platform’s transactions. Kraken, however, opted to pay the $30 million fine as a settlement to the commission, along with shutting down its staking offerings.
The Shanghai upgrade has slightly affected the Ethereum ecosystem and the price movement of its token. Data from on-chain platforms suggests that only a tiny amount of ETH has been withdrawn, with Nansen.ai indicating a -0.25% change in staked Ether.
Last month, CryptoQuant revealed that 60% of all staked Ether are held in a significant loss. The platform further suggests that selling pressure on the token would drop after the Shanghai upgrade.
However, an analyst at Nansen, Andrew Thurman, noted that most withdrawals are from addresses redeeming rewards, not entire stakes. According to recent data, 4.35 million Ether are staked at more than $3000, a price point the coin hasn’t attained since last April.
Binance Support Staking Withdrawals
Following the implementation of the Shanghai upgrade early Thursday, April 13, Binance announced that users with staked Ether on its exchange can now redeem their coins. According to the crypto exchange, users can use the BETH holdings on a 1:1 basis beginning on April 19.
The Shanghai upgrade, also known as the Shapella hard fork, opened the withdrawals of over 18 million ETH staked in the Ethereum blockchain for the first time in three years. Per Binance, user requests for withdrawals, once submitted, cannot be reversed.
In addition, the exchange noted that the process would initially be slow and require at least 15 days to weeks before it could be completed. Accordingly, users will receive Ether in their spot addresses, and unapproved BETH assets locked in ETH withdrawal requests are not qualified for the rewards.
It is worth noting that BETH is a wrapped Ethereum token issued by Binance, which is pegged 1:1 to ETH. Meanwhile, Binance pointed out that the expected distribution date of the redeemed crypto assets would be displayed before users complete their withdrawal requests.
Additionally, the exchange explained that each user would have a daily withdrawal quote because of the processing limits on the Ethereum network. Meanwhile, the Ethereum network has lined up some upgrades to its ecosystem aimed at scaling the efficiency of the protocol following the completion of its Merge upgrade last September.