80% of Ethereum Stakers Withdrawal Made by Single Entity – Will Price Drop?

• Ethereum recently implemented the Shanghai upgrade to complete its transition from the Proof of Work to the Proof of Stake algorithm.
• CoinShares reported that less than 5 percent of validators have withdrawn their staked ETH funds, with Kraken representing 80 percent of withdrawals.
• Ethereum has provisions for validators seeking to exit staking entirely.

Ethereum Transitioning from PoW to PoS

Ethereum recently completed its transition from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism with the implementation of its Shanghai upgrade. This enabled investors to withdraw their staked ETH.

ETH Withdrawal Statistics

CoinShares reported that less than 5 percent of validators have withdrawn their staked ETH funds so far, with 19,500 validators currently in the queue and waiting time estimated at almost 12 days until all withdrawals are made. There are also 7,800 validators in the deposit queue, with waiting time estimated at almost 4 days. Of these withdrawals, Kraken represents over 80 percent due to its being charged by the US Securities and Exchange Commission for offering and selling crypto asset staking-as-a-service program without proper registration.

ETH Staked on Beacon Chain

As of March 2021, more than 16.7 million ETH or more than $27 billion were locked in a smart contract network via over 520,000 validators on Ethereum’s PoS Beacon chain. The amount each given validator can withdraw is determined by the state of his/her account itself without any input needed from users at any point during withdrawal process as it is done automatically by the consensus layer on a continuous loop.

Provisions for Validator Exiting

Ethereum has made provisions for those wanting to exit their stake entirely through various means such as slashing fees or withdrawing tokens held within accounts while not participating in consensus anymore. This requires users to forfeit their tokens held within an account while not participating in consensus anymore and will result in them having no access or shares in rewards earned by current active participants anymore either directly or indirectly via delegations/shares etc..

Conclusion

Although Kraken was responsible for 80% of total withdrawals since it was forced by SEC into shutting down its services for US customers, very few other validators have followed suit so far indicating that there may not be an imminent ETH selloff anytime soon despite fears about potential price impacts when large amounts are released into circulation again after long periods being locked away inside smart contracts networks like Ethereum’s PoS beacon chain which serves as one example here where over 16 million Ether tokens ($27 Billion USD worth) had been deposited already this past March 2021 already!

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