Ethereum Shanghai Upgrade Unleashes $31 Billion in Staked Assets

In April 2023, Ethereum's Shanghai upgrade released approximately 18 million ETH, which is about 15% of the total circulating supply. This allowed investors to withdraw a $31 billion stash that had been accumulating since the end of 2020.

Jim McDonald, CTO of Attestant, predicted that the price of Ethereum would drop sharply as 50-70% of early withdrawers intended to cash out. However, Alex Esin from P2P.org expected the impact to be muted due to withdrawal queue restrictions limiting immediate supply.

The upgrade included Ethereum Improvement Proposals 3651, 3860, and 3855 to restrict transaction costs for technical applications. Developers referred to the combination of Shanghai and Capella upgrades as Shapella.