Ethereum Developers Set Staked Ethereum Withdrawals for March 2023
Even before the Merge activated in September 2022, Ethereum stakers have been asking, “When unstaking?” Now Ethereum developers have a tentative answer: As early as March 2023.
Withdrawals of staked Ethereum on the Beacon Chain will go live with the next major Ethereum update, known as Shanghai. Ethereum Improvement Proposal (EIP) 4895 describes it as “Beacon chain push withdrawals as operations.” These operations will be possible as a system-level operation type that enables withdrawals from the Beacon Chain to the Ethereum Virtual Machine (EVM).
The Ethereum Virtual Machine makes it possible to run smart contracts on Ethereum. It could be seen as Ethereum’s best effort to fill its vision of becoming “the World Computer.”
And what does it get used for? CryptoKitties, ugly cartoon monkeys, ICOs, and DeFi apps. However, Ethereum makes the case that DeFi might be one of the best possible applications of a “World Computer.”
Ethereum developers will also include EVM Object Format (EOF)-related upgrades described in EIP 3540, EIP 3670, EIP 4200, EIP 4570, and EIP 5450 in the Shanghai update. If EOF proves too complicated for developers to have ready for the planned March 2023 activation date, they might push it back to Fall 2023.
If all goes as planned, developers may implement a hard fork to add the proto-danksharding system decribed in EIP 4844 sooner rather than later. Proto-danksharding can separate the Ethereum network into smaller segments to make it easier to scale. It uses blobs of data and pushes for a system-wide move to rollups as a make-do solution until fully developed danksharding protocols can be implemented.
Like withdrawal of staked Ethereum, these upgrades depend on developers getting the Shanghai upgrade up and running. They can test the new features and protocols on the new Shandong testnet, which includes everything that was activated with the Merge.
On November 14, Shangdong added Beacon Chain withdrawals.
Ethereum developers are winding down the Ropsten and Rinkeby testnets. Ropsten is expected to shut down as early as December 15 and Rinkeby will shut down in mid-2023. They say developers using these testnets for app testing should move to newer testnets like Goerli or Sepolia.
Staking ETH
Under the current system, if you have at least 32 ether (ETH), you can stake it on your own and earn a 5.4% APR. You also get the privilege of activating validator software that helps the Ethereum network run smoothly by storing and processing data and adding new blocks to the Ethereum blockchain. So the real cost of staking ETH on your own is 32 ETH, a dedicated computer, and a reliable Internet connection. You could get a suitable server for cheaper than you may think. Just don’t tell your boss if you’re trying to make the case for upgrading your employer’s computer network.
You could also join a staking pool, which is normal if you don’t have 32 ETH. When you deposit your ETH with a staking pool, you’ll often get a token known as staked ether (stETH). This is known as liquidity staking because you can trade the staked ether token like normal. Be careful, though! Staked either is supposed to track the underlying ETH in value, but can depeg if something goes wrong. Staking pools may not run directly on the Ethereum network and introduce some third party risk. Staking pools could go under if something goes wrong.
You could also stake your ETH on a centralized exchange that offers staking services. This also comes with the third-party risk that the exchange goes bankrupt or otherwise cuts off access to your funds.
Decentralization supporters also criticize exchanges that offer ETH staking services of using the deposits to create several validators, which makes the Ethereum network more centralized. Of course, it may not be a good idea to keep your funds on a centralized exchange anyway. FTX, am I right?
In the meantime, hang on to your staked ether if you have it. As early as March 2023, you might be able to withdraw it once Ethereum developers get the Shanghai upgrade activated.
