Shanghai, Capella, Shapella, 0x01, execution layer, consensus layer – while the web3 community undoubtedly boasts impressive technical competence, Ethereum’s latest update had even the best of us confused at times.
A Nansen report on Ethereum withdrawals reviewed by CryptoSlate shone a light on everything that’s going on, using data derived from Nansen’s Shapella dashboard.
Sha-nghai Ca-pella
The Shapella Upgrade, successfully executed on April 13, marked a significant milestone in Ethereum’s multi-stage roadmap by enabling the withdrawal of staked Ethereum (ETH) on the Beacon chain. This highly anticipated upgrade reduces the liquidity risk associated with staking, encouraging increased participation.
The name comes from combining the two simultaneous upgrades, Shanghai and Capella. Shanghai upgraded the execution layer, and Capella upgraded the consensus layer. The upgrades differed only in terms of the part of the network they targeted, as the goal of both upgrades was to open withdrawals.
Ethereum staking
Unlike other Proof-of-Stake (PoS) systems, Ethereum requires validators to stake a fixed amount of 32 ETH, with rewards based on this amount. Validators may have more than 32 ETH due to accrued rewards or less if slashed or penalized. To enable withdrawals, validators must set their withdrawal credential prefixes from 0x00 to 0x01.
Since the Shapella upgrade, the number of validators with the 0x01 credential has increased from 40% to 83.3%, according to Nansen’s data.
Furthermore, Ethereum’s staking system involves two types of withdrawals: partial and full.
Partial withdrawals include withdrawing accrued rewards while keeping the minimum 32 ETH required for validator operation, processed periodically through an automated process in approximately 2-5 days.
Moreover, full withdrawals involve withdrawing a validator’s entire balance voluntarily or following a slashing event. Full withdrawals take longer than partial withdrawals, involving multiple steps: the…
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