An overview of the upcoming Shapella upgrade on the Ethereum Mainnet, including SCRYPT's actions to protect its clients, the potential market impact of the upgrade, and Lido's plan to enable withdrawals for stETH in May.
As the Ethereum ecosystem continues to evolve, industry participants are preparing for the upcoming Shapella upgrade on the Ethereum Mainnet. Scheduled for April 12, 2023, this technical upgrade will enable validators to withdraw their stake back to the execution layer and introduce new functionality to both the execution and consensus layer.
In addition, Lido plans to enable withdrawals for stETH inMay, which has sparked discussions about the potential impact on the market. Some believe that the increased liquidity from staking rewards may lead to short-term uncertainty and bearish price action, but any impact may be muted by macro factors such as strong BTC dominance and CPI data being released on the same day. Others hold a bullish view, stating that the staking ratio will jump post-Shapella, which will pump ETH with reduced supply. However, it is important to note that once the staking ratio increases, the staking yield goes down, and the network needs to burn more gas to keep ETH deflationary.
With this in mind, SCRYPT is taking proactive measures to protect its clients during the Shapella upgrade. To avoid any potential issues,SCRYPT will pause ETH (and ERC20) deposits and settlements from April 12th, 20:00 UTC. Trading services with execution capabilities will continue to be fully operational. This will ensure that any deposits are received and credited in clients' accounts before the cut-off time.
In the long term, the Shapella upgrade and the enabling of stETH withdrawals will benefit the Ethereum ecosystem and enable other interesting use cases for staked ETH, such as restaking. It is essential to remain cautious and monitor the situation closely, especially in the short term.
SCRYPT will continue to provide updates and communicate any further developments to its clients to ensure a smooth transition during this period.
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