Coinbase Will Allow ETH Unstaking 24h After “Shapella” Upgrade

With Ethereum’s Shanghai-Capella—commonly referred to as Shapella—upgrade on the horizon, Coinbase published an update on what it will mean for its users. While ETH staking has been available for year, the soon-to-come upgrade will finally enable unstaking, and the largest publicly-traded cryptocurrency exchange will start processing it 24 hours after Shapella goes live.

Coinbase Users Will be Able to Unstake ETH 24 Hours After Shapella Goes Live

In a Twitter thread published on Wednesday, March 15th, Coinbase revealed it is planning to start processing Ethereum unstaking requests 24 hours after the Shanghai-Capella upgrade goes live. The exchange stated that after the unstaking order is processed, users will receive their assets, as well as accumulated staking rewards.

Coinbase, however, pointed out that there is no need for customers to unstake their ETH unless they specifically want to do so, and highlighted that the assets will be safe and secure during the upgrade. The exchange is currently offering an annual percentage yield of 6% on staked Ethereum.

The upgrade will also cause forced ustaking on another cryptocurrency exchange—Kraken. In February, the Securities and Exchange Commission announced a $30 million settlement with the exchange which stipulated that all assets save for ETH are to be immediately unstaked, and Ethereum after the upgrade is complete.

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“Shapella” Expected to Boost the Percentage of Staked ETH

Staking was introduced to Ethereum in December 2022, but all committed tokens were unavailable for withdrawal since then. ETH’s previous major upgrade, the so-called “Merge”, while significantly boosting efficiency and lowering energy consumption through the transition to the proof-of-stake model, didn’t enable unstaking.

By late February, only 14% of all ETH was staked. This is in stark contrast to other PoS blockchains like Solana which average around 70%. The percentiles are expected to change as soon as the upcoming upgrade enables so-called liquid staking which will remove the current liquidity risk.

Delegating ETH tokens to a project that stakes them on the depositor’s behalf is known as “liquid staking”. The depositor typically receives a “receipt” in the form of tokenized assets that can be redeemed for staked ETH. The benefits of ETH liquid staking are numerous. First, liquid staking can be done with relatively little ETH compared to direct staking which requires an initial investment of 32 ETH. Additionally, after staking their ETH tokens, users won’t have to give up access to them.

Editorial note (March 16th, 2023, 12:56 PM EST): A typo in the headline was corrected.

Are you going to unstake your ETH as soon as the upgrade is complete? Let us know in the comments below.