ETH withdrawals are now possible.
The Shanghai Ethereum upgrade has been successfully implemented, enabling the withdrawal of staked ETH and effectively completing the network’s years-long transition to proof-of-stake.
Last September, Ethereum successfully executed its much-anticipated merge event, which changed the way ETH is created and how transactions on the Ethereum network are validated. The upgrade saw Ethereum move to a proof-of-stake consensus mechanism where users stake ETH with the network to validate on-chain transactions, and are rewarded for that participation with newly created ETH. Since ETH staking debuted in 2020, participants have deposited more than $34.56 billion worth of ETH into the network.
However, the fund – and the rewards it generated – were not accessible to users, even after the merge. Only now, with the implementation of Shanghai, are the funds available for withdrawal. And only now can Ethereum’s transformation into a proof-of-stake network be considered complete.
The road to Shanghai has been a long process, characterized by repeated concessions made by Ethereum’s core developers to speed up the release of upgrades. Shanghai was originally intended to cover many other improvements to the Ethereum network, including proto-danksharding – a simplified data sampling process that would make layer-2 transactions on the network substantially cheaper and faster – and EOF, a series of much-needed updates to the Ethereum Virtual Machine (EVM), the network’s underlying mechanism that deploys smart contracts.
However, the update was scrapped from Shanghai, to ensure that ETH withdrawals were rolled out as quickly as possible. Even minor changes to Ethereum’s coding methods were left out of the update, despite the fact that such a decision could leave the network mired in technical debt for years.
The pressure to release Shanghai makes sense: the security and accessibility of cryptocurrencies worth tens of billions of dollars is at stake. And any shortcomings in the execution of the upgrade could spell big trouble for the network – not just from annoyed users, but also from large intermediaries like Lido and Coinbase that currently represent the bulk of the betting power on Ethereum. Government regulators were also no doubt watching closely.
Fortunately, those concerns are now in the past. After Ethereum reached the 194,048th epoch at 18:27 EST, the network’s mainnet began forking to integrate the Shanghai upgrade. During that epoch, eight slots were missed, a standard number that usually represents nodes that haven’t updated their clients for Shanghai. But the Ethereum network continued to process transactions, a signal of a successful upgrade. Soon after, staked ETH withdrawals began processing smoothly.
Stakers who hold their ETH through intermediary staking pools or centralized crypto exchanges will have to wait longer. Lido said the ability to withdraw staked ETH will be introduced for customers in about a month; Coinbase, for its part, said its customers may have to wait several months before their staked ETH can be accessed. Each intermediary ETH staking service will open withdrawals on its own timeframe.
