Ethereum goes ahead with upgrade to allow withdrawals
During their first virtual meeting of the year, Ethereum developers said they are pushing ahead with a key software upgrade that would let people withdraw Ether tokens used to operate the blockchain network.
The developers previously said in December that they were hoping to roll out the upgrade in March. While many developers wanted to include several other features into the upgrade, called Shanghai, a slew of those are being delayed in order to enable token withdrawals as quickly as possible.
“We should probably be just removing stuff at this point,” Tim Beiko, who coordinates Ethereum developers, said on the call that was broadcast on YouTube.
The main feature that Shanghai would enable is letting people whose tokens are used to order transactions on the network to withdraw these coins. Today, some 15.83 million Ether — valued at nearly $20 billion at current prices — are being held in special so-called staking wallets, with their owners unable to withdraw the coins, according to data tracker Beaconcha.in. The token owners are getting paid fees for ordering transactions.
Shanghai follows the Merge upgrade that took place in September and allowed the network to use staked coins instead of power-hungry computers to order transactions. The change cut Ethereum’s power consumption by about 99% and was dubbed the most ambitious software upgrade ever in the blockchain world.
While the price of Ether rallied for several months ahead of the Merge, it’s fallen by about 15% since, along with much of the rest of crypto, shaken up by the fallout from the November bankruptcy of the FTX exchange. Many crypto lenders, such as Celsius Network, which used to offer crypto holders higher returns than staking, shuttered last year as well. Their demise has made staking more attractive, as one of a few remaining ways to earn yield in crypto with coin prices not appreciating.
Shanghai is expected to push more people and institutional investors to stake their coins to support the Ethereum network and earn yield.