The upcoming Shanghai upgrade of the Ethereum blockchain, which is set to begin unlocking 17,000,000 ETH tokens from April 12, 2023, has the Ethereum community excited. However, a crypto influencer on Twitter, known as Crypto Tony, has suggested that the short-term impact of the unlock may be negative for the market. He argues that the market could experience a massive dump as people anticipate the outcome of such a big unlock.
While the long-term effects of the upgrade are expected to be favorable for the crypto market, the unlocking of over $32 billion worth of ETH tokens could provoke a bleeding trend. Nevertheless, confirmed reports indicate that the unlocking process is dynamic and dependent on the number of validators leaving the network. Exiting validators will have to go through an exit queue and wait for either 27 hours or 36 days for the withdrawal to be finalized. The wide gap between the two waiting periods aims to disincentivize bad actors.
Recent statistics show that users are staking a big chunk of the total supply of different proof-of-stake cryptocurrencies, with Ethereum having only 16% of its tokens staked. The price of ETH has remained relatively stable at $1,804 over the past week, with only 2% gains.
