On Wednesday, Ethereum developers successfully completed the eagerly anticipated Shanghai hard fork, allowing users to withdraw the money they had previously staked in the network. Thus, earlier today, ETH broke a record, hitting an 11-month high of $2,125. According to CoinMarketCap, the currency is trading at $2.109 at the time of writing.
Shanghai Upgrade Benefits Ethereum! ETH Reaches 11-Month High
While few analysts concurred that allowing staked ETH withdrawals wouldn’t likely result in much sell pressure, few also predicted a substantial price increase. However, ETH experienced a 6% increase on Thursday, trading mostly at $2,000 before witnessing another increase in the early hours of Friday.
The Shanghai upgrade also means that investors can now stake coins on the Ethereum mainnet, giving a source of passive income in addition to enabling the option to withdraw the staked funds, which is one potential explanation for the price increase. The improvement has additionally given banking institutions more assurance in their staking-as-a-service offerings.
“It is entirely possible that there will be more people willing to stake ETH (locking up liquidity and reducing the available supply) after the upgrade, as people will be more certain that they can safely unstake their ETH,”
Matthew Niemerg, co-founder of privacy-enhancing blockchain network Aleph Zero
Other Increases
Additionally, there has been a huge price gain for the governance tokens of a number of liquid staking platforms, such as Frax Shares, Lido DAO, and Rocket Pool. With the help of these platforms, Ethereum owners can stake their ETH and earn a liquid staking token in return. This token can then be utilized inside the DeFi ecosystem to increase income.
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