The upgrade on the Ethereum blockchain, known as "Shapella" was triggered half an hour after midnight, European time. This means that the Ethereum network is now processing withdrawal requests. It's a big de-risking event.

Even after the Ethereum Merge of last September, people who staked Ethereum had to wait to withdraw. This is now finally possible, even though at first only the rewards can be withdrawn. This upgrade will make Ethereum finally fully operational as a proof-of-stake network. It took so long, as Ethereum, when it was launched, started out as proof-of-work, to quickly launch with a tried and tested consensus mechanism.

0.4% unstaked

Since the fork, around 9 hours ago at writing this article, the 24h change in staked ETH is around -0.4%. This amounts to 80 thousand ETH having been unstaked, from a total of 17.5 million. Hardly anything to worry about in terms of security or potential price drop. Indeed, the price of ETH hasn't moved much.  

Big risk removed

The fact that staked Ether can now be unlocked, removes a big centralization risk for Ethereum. It was a bit uneasy, this past period where millions of ETH were stuck at centralized exchanges like Coinbase, which offer staking as a service. These exchanges are obviously vulnerable to government intervention - and without users being able to withdraw their ETH, this creates a pressure point for potential government censorship. 

A new bond of the internet

On the positive side, the now fully functional Ethereum ecosystem will make a new era possible of 'internet bonds'. As Ethereum is by far the most dominant proof-of-stake network, the staking yield it offers can function as a sort of benchmark for the staking market. A bit comparable to what American treasuries are for the bond market: the benchmark of the lowest-risk yield.

Roadmap ahead

Co-founder of Ethereum Vitalik Buterin attended last night a live event of the Shapella upgrade, called the Ethereum Cat Herders watch party. He said:  

"We're in a stage where the hardest and fastest parts of the Ethereum protocols transition are basically over. Very significant things still need to be done, but those can be safely done at a at a slower pace."

The steps of the Ethereum roadmap for the coming years have to do with scalability. So-called Danksharding is one. It is tailor-made for the rollup era. It paves the way for a future where much cheaper (and faster) layer 2 networks can flourish. Rollups, like sidechains, take the pressure off Ethereum by performing transactions on a separate, layer 2 chain. 

Read more: The Ethereum roadmap.

Read more: What is staking?