With the April release of the Ethereum Shanghai update, ETH holders can finally withdraw their holdings.
This particular improvement is focused only on one feature: the withdrawal of staked Ethereum. Since December 2020, when staking began, and the network began its transition to a proof-of-stake consensus process, users who locked up their coins have been unable to withdraw them.
This will likely change in April. Others have stated that people would soon withdraw their ETH and sell it to reap profits.
The profits will not be substantial. If you had frozen your ETH holdings on December 1, 2020, the price was $612. Selling at current prices would still net you a 156% profit.
According to Dune, since the beginning of betting, just 16% of bettors have invested money in financial terms. If the update were implemented today, most consumers would suffer significant losses.
It is hard to predict how individuals would behave when confronted with the possibility of double-digit losses. Nonetheless, there are around $6.25 billion in winning wagers; some may sell.
After almost three years, when the developers finally delivered the much-anticipated merging event, people will double down. As individuals realize that if they put their money into this black box, they can earn a dividend and withdraw their money anytime they want, the risk profile of staking decreases dramatically.
Other DeFi projects also place this wager, releasing a new levered mechanism. The most recent update to Aave accomplishes just this. This is how it operates: Deposit your Ether into the liquid staking protocol Lido Finance to obtain staked Ether (stETH); use the stETH to borrow additional Ether on Aave; restake the Ether on Lido; and continue the cycle based on your level of depravity.
Spark Lend, a not-yet-launched startup created by a few MakerDAO developers, will also provide a comparable feature.
This is very dangerous, and you should consider yourself liquidated if Ethereum experiences any fluctuation.
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