The ‘crypto winter’ is over. If Bitcoin is having a very good 2023, the second most important cryptocurrency is following a similar path. Ethereum is at a critical moment as Shapella, its most important update since ‘The Merge’, is now complete.

Ethereum is now all ‘PoS’. All the promises made with ‘The Merge’ are already available in Shapella update 194,048. Ethereum has moved from the ‘Proof of Work’ (PoW) model to the ‘Proof of Stake’ (PoS) model. This means, among other things, that as with Bitcoin, mining is left behind and ‘staking’ is allowed.

I’ve been waiting for this update since the end of 2020. With this update, validators can finally withdraw their locked ETH. The “staking” feature has been enabled, but this “investment” has been locked for several years. Not now.

About half of the 562,727 validators are withdrawing some of the Ethereum, taking advantage of what they may have gained during this time, and it wasn’t until Shapella that they were able to migrate it.

Millions of Ethereum unlocked. According to one estimate, around 18.1 million ETH has been unlocked, which is equivalent to more than 34,000 million Euros.

Between 2.8 and 3.2 ETH is the average amount that investors withdraw. So, although Shapella already allows you to withdraw your investments, the average is a few Ethereums. As might be expected, this is an amount similar to the profitability to be achieved during the ‘staking’ process over this period.

Ethereum adopts a more decentralized ecosystem. By its very nature, Ethereum was already decentralized, but the move to ‘Proof of Stake’ is a big step in that direction. With Shapella, anyone with a computer can verify transactions.

Where previously most nodes were located on external exchanges such as Coinbase or Binance, maintenance of their own nodes is now encouraged, so-called ‘cold wallets’.

Paradoxically, Ethereum’s value has increased. Shapella allows investors to take their Ethereum with them, which is technically supposed to devalue. However, this freedom of movement has been well received and Ethereum has risen by about 10% since the arrival of the major update. It even exceeds the $2,000 mark.

Figures vary by week, but Point services like LookonchainThe number of deposits exceeded the number of withdrawals.

Very consolidated as nº2. Bitcoin’s dominance is obvious, but Ethereum has been in second place for several years and, far from losing strength, it has managed to establish itself as a very viable alternative to the most popular cryptocurrency.

Ethereum has millions of investors and hundreds of blockchain projects working with its protocol. Shapella’s arrival, ‘staking’ and the freedom to withdraw funds want to further encourage its use.

Beyond the ever-volatile and unpredictable values ​​these cryptocurrencies hold, their systems are slowly being updated to allow for new ways of monetization.

Image | Vitali Mazur

on Xataka | The Bank of Spain has warned of the risks of cryptocurrencies due to their “excessive volatility, complexity and lack of transparency”.