Analysis of the Potential Impact of the Ethereum Shanghai Upgrade

Ethereum plans to undergo the Shanghai upgrade in March this year, one important aspect of which is the opening of ETH staking unlock (EIP-4895). As of now, the total amount of staked ETH is approximately 15.85 million, accounting for 13% of the total, with 495,000 active validators and an annualized rate of 4.2%.

There are viewpoints suggesting that the unlocking of open staking could bring significant selling pressure, especially considering the lower costs for early stakers. However, analyzed from multiple perspectives, this concern may be exaggerated.

1. Gradual Release Mechanism

Shanghai upgrade adopts a progressive unlocking model. A maximum of about 55,000 ETH can be unlocked daily to prevent a sudden large outflow. The withdrawal rate will be dynamically adjusted based on the total amount staked.

2. Characteristics of Early Participants

Early stakers are mostly long-term supporters with a higher risk appetite, and their willingness to sell is relatively low under the current market conditions.

3. Some exit demands have been met

Users who have staked through certain platforms already have exit channels, such as exchanging staked tokens for Ether, and some exit demands have been met previously.

4. Attractiveness to Institutional Investors

The unlocking feature may attract more institutional investors because:

• Increased user confidence
• Provides a better exit mechanism
• Provide relatively stable returns during a bear market

After the staking is expected to open, there may be a slight short-term decline, but the overall trend is upward, and the staking volume may exceed 20% of the total amount of Ether within a year.

5. Staking Cost Factors

The average cost of most staked assets is estimated to be above $1500, higher than the current market price, which reduces the motivation to sell.

6. Fundamental Changes in the Nature of ETH Assets

Since the merger, ETH has shown a deflationary trend, with daily potential selling pressure reducing by about $15 million. ETH can earn an annualized yield of approximately 4.2% through staking, becoming an underlying asset in the ecosystem with more use cases and potential value storage attributes.

Compared to other projects, the new issuance rate of Ether has significantly decreased:

• The annual addition rate of Ether is approximately 0.01%
• Far lower than BTC (1.8%), Dogecoin (3.58%), and Solana (6.43%)

The daily新增价值is also significantly lower than other public chains:

• ETH: less than $50,000
• BTC: over 15.8 million USD
• Solana: $1.27 million
• Dogecoin: $950,000

7. The Importance of Community Consensus

Ethereum has a strong base of developers, ecosystems, and users, forming a solid community consensus. With the development of the ecosystem and L2 expansion, its position as a foundational settlement layer and security provider will be further consolidated.

8. Dynamic Balance of Staking Yield

The amount of ETH staked is inversely proportional to the yield, forming a dynamic equilibrium. Low staking volumes will increase yields, attracting more participants, especially making it more attractive during bear markets.

9. The Comprehensive Impact of the Shanghai Upgrade

In addition to the staking unlock, the Shanghai upgrade also includes other improvements, such as reducing gas fees and supporting the deployment of more complex contracts, which are beneficial for the long-term development of the ecosystem.

Conclusion

The impact of Shanghai's upgrade to open withdrawal features on ETH selling pressure may be limited, but in the long term, it is beneficial for the development of the Ethereum ecosystem. However, ETH price fluctuations are also influenced by other factors, and investors should maintain independent judgment and pay attention to risk control.