ETHEREUM DEVELOPERS BELIEVES THAT ETH WITHDRAWAL SHOULD BE DELAYED

Some Ethereum developers are reportedly considering delaying their staked ETH to a later ethereum upgrade. The withdrawal of staled ETH where expected to be enabled with the Shanghai upgrade which is scheduled to be sometime in March. As you know already that Ethereum initially launched a proof of stake beacon chain way back in December 2020. Since that time, 60 million ETH where 16 ETH worth 25 billion dollars has been deposited into the staking smart contract and validators have been unable to claim rewards or withdraw the stakes.

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As explained by Decrypt, Shanghai is still scheduled for March but a small group of Ethereum developers believes that ETH withdrawal should be delayed. This is basically because the way ETH withdrawals would be coded will require all ETH withdrawal codes to be rewritten at a later date. Ethereum developers were planning on allowing ETH to withdraw with the Shanghai upgrade using code that would have to be rewritten as part of the next upgrade later this year. This is not a deal but most Ethereum argued that delaying withdrawal would be worse. Also, a small group of developers argued that writing the original withdrawal code will not only take lots of time and effort but could cause technical issues and exploit for Ethereum further down the line.

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They believed that withdrawal should be delayed until the final codes is complete. If I understand correctly, Ethereum developers are planning in providing the original plan should is to allow ETH to withdraw using code that would have to be rewritten. This is good news for Ethereum stakers who have been waiting for two years to withdraw but it could be for ETH. You should consider that the ETH price is around $600 when the beacon chain launched, this means that early ETH stakers are sitting on a massive profit of almost 3x. It is like they will want to cash out.

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At the same time, many ETH stakers are holding to massive losses and are desperate to cash out to meet debt obligations. Lots of this sell pressure could come from exchanges given that they are the largest Ethereum validators and scrape for cash. The good news this, there will be a limit on how much ETH validators can withdraw which should limit any selling pressure for these entities. The bad news is we are currently in a crypto bear market and in that market, even a small amount of consistent selling impart ETH price. The cash is that ETH could see a short squeeze from leverage traders if its price fails to plummet after withdrawals are enabled.

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