Coinbase, America’s largest cryptocurrency exchange, anticipates a surge in staking withdrawal requests after Ethereum developers activate the feature next month. In discussing how the update could affect the company on Wednesday, Coinbase stated that it might take “weeks to months” to properly execute unstaking requests.
Coinbase noted in a blog post that the future Shanghai and Capella updates (known together as Shapella) will allow Ethereum users to unstake their Ether (ETH) for the first time since the Beacon chain launched in 2020.
Despite the fact that Ethereum’s execution layer “merged” with its beacon chain in September 2022, staker holdings remained locked up. This has created a temporary situation in which staking providers like Coinbase can allow users to stake ETH on their platform – but not to withdraw it.
However, after Ethereum completed its Goerli testnet upgrade on Tuesday, the official Shapella rollout is expected by roughly mid-April.
“Unstaking requests will open to all Coinbase customers at the same time and will be relayed to the Ethereum protocol and queued based on when they are received,” wrote Coinbase. As the firm notes, staking requests are processed on-chain, and only acts as a “conduit” to pass unstaked ETH to customer once released by the protocol.
Coinbase Providing Liquid Staking Option
Unstaking requests will be available in customers’ accounts about 24 hours after the change is completed. Customers can anticipate to wait for some time after submitting their request.
“Customers may need to remain patient,” said the exchange. “We anticipate the Ethereum protocol will take weeks to months to process unstaking requests immediately following the upgrade.”
To cater for this, the exchange offers its users cbETH as a liquid staking option as a derivative of staked ETH on the platform. This enables stakers essentially trade ETH while it is still locked up, with the promise of redeemability at a later date.