150,000 ETH Withdrawn, Thousands of Validators Wait to Exit

More than 150,000 eth has already been withdrawn on the first day of the unlock according to blockchain data.

Some 60,000 partial withdrawals have already been processed. They run at 16 per block, every 12 seconds, amounting to circa 100,000 withdrawals a day.

They’re mainly taking out the reward, usually about two eth, with few withdrawing the actual staking deposit of 32 eth.

Thousands more validators are waiting to withdraw. One estimate by Beaconchain puts it at 17,500, amounting to 500,000 eth – worth about $1 billion – if full withdrawals and just 40,000 eth if partial.

Interestingly we have not yet seen even one full withdrawal of 32 eth. According to the Ethereum Foundation announcement of the upgrade, it allows “full and partial withdrawals for validators,” so presumably we’ll see one at some point.

It may be the partial ones are completed first, but the full withdrawals might be less interesting than the arrival of these potentially rhythmic partial withdrawals, or rewards that now actually go to the staker.

That’s because for the first time in almost precisely six months, the daily miner stakers reward is back and though the scale is vastly different, just 10% of what miners use to get, it is still potentially new dynamics.

In particular, tons of these withdrawals appear to be going to the Lido smart contract, that being the tokenized staking platform through stETH.

Until now it hasn’t been clear just how exactly Lido processes the withdrawals and gives it to the stETH holders, but it will start becoming a lot more clear, although for now they appear to just be sitting on the smart contract.

In bitcoin – and in eth prior to miners being kicked out – there are complex price related dynamics regarding just what miners choose to do with their daily reward.

This dynamic has returned to eth too and initially in a burst, though it isn’t clear what these stakers plan to do with the rewards.

They could just put them towards staking or they might hodl or indeed they might convert to something else, while leaving the actual staking deposit intact.

One key difference between miners and stakers is that stakers are far, far more distributed. Bitcoin miners nowadays are what mining pools used to be, about two dozens of them with giant infrastructure that includes buying out a full on hydro-power station.

To join mining, you can as a hobbyist but it’s a hassle. So the mining related price dynamics were and in bitcoin still are more of a business nature, albeit a business that has crypto as a product.

Joining staking is extremely convenient, certainly by comparison, with pretty much no barriers whatever, and staking providers are actual pools, rather than the staker being the pool.

That might matter because the staking price related dynamics might be different and might amount to no more than just the usual price dynamics in as far as stakers may act no different than holders.

They’re not running a business, generally speaking, don’t have necessary costs to cover through their ‘product,’ and don’t have expansion related costs.

So they’re holders, basically. If they think price is low then they might hold the reward, if their proportion of eth holdings is becoming a lot then they might rebalance, and so on.

In which case, the arrival of rewards might not be interesting save for the initial temporary phase as it might actually not add new dynamics at all because there isn’t a necessary cost to cover which is what makes bitcoin mining a ruthless Game of Thrones.

However, it has barely been a day so we’ll have to wait and see, but the lack of withdrawals of full deposits, at least so far, indicates considerable confidence in ethereum.

Anecdotally as well, a few have mentioned they’ll withdraw the reward but not the deposit. That makes sense since the reward has become a decent amount of about $4,000 for most, and it’s called a reward so it probably feels like a reward, rather than an investment.

For now. Later on once they’re rewarded and they’re used to being rewarded, they might have the luxury of the fairly big ‘problem’ of figuring out where to send it.

The answer to that, as with all assets, will be a moving point dependent on market sentiment and events.

Rather than a rush to exit therefore, we seem to be getting more a rush to enjoy ourself this spring, with this somewhat surprising development making the unlock less of a big bang and more of a completeness of ethereum in a way as the asset is no longer quite in suspense and has sort of reconnected with a significant part of itself that may well add vibrancy.

Because these guys are now getting rewards and well, that makes them happy presumably, so eth is a happy asset now or more correctly where the traditional financial world is concerned, a real asset.

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• Source: https://www.trustnodes.com/2023/04/13/150000-eth-withdrawn-thousands-of-validators-wait-to-exit