Binance Announces Delays in Ethereum Withdrawals Following Shapella Upgrade
Binance has announced potential delays in Ethereum withdrawals due to processing limitations following the Shapella upgrade, while Ethereum's value has rallied 10.2% since the upgrade's implementation
On Thursday, April 13th, cryptocurrency exchange Binance revealed that Ethereum withdrawal requests might take several weeks to be processed. This announcement came just a day after the Shapella upgrade went live on the Ethereum mainnet. Ethereum's Shapella upgrade, one of the most anticipated events in the crypto space for 2023, now allows ETH validators to withdraw their locked funds. However, Binance cited the Ethereum network's processing limitations as the reason for setting a daily redemption quota for each user.
Extended ETH Withdrawal Times on Binance
Binance, the world's largest crypto exchange by trading volume, informed users on its website that they would be able to redeem their locked ETH funds starting April 19th. In the Thursday announcement, the company also disclosed that unstaking requests could take anywhere from 15 days to several weeks to be completed.
The duration of ETH unstaking requests depends on the total number of ETH withdrawal requests by staking participants and the Ethereum network's processing capabilities. The processing limitations of the Ethereum blockchain played a significant role in Binance's ETH redemption structure and timeline.
Additionally, Binance clarified that BETH (Binance's tokenized version of staked ETH) tokens locked in pending withdrawal requests would not earn any ETH 2.0 staking rewards. Once submitted, users cannot cancel their withdrawal requests.
Over 400,000 partial withdrawal requests and nearly 30,000 full withdrawal requests are currently pending, according to data from rated.network. It is worth noting that a large portion of these withdrawals is forced, as US-based crypto exchange Kraken had to discontinue its staking service following a $30 million settlement with the SEC.
ETH Rallies 10.2% Since Shapella Upgrade
The highly anticipated Shapella upgrade launched on the Ethereum mainnet at 10:27 p.m. (UTC) on Wednesday, April 12th. The hard fork comprises modifications to the execution layer (Shanghai) and the consensus layer (Capella) of the network. Most importantly, it enables ETH validators to withdraw their staked funds from the network.
In the run-up to the upgrade, there were concerns that Ethereum's value would drop due to validators' newfound ability to liquidate their staked ETH. However, contrary to popular belief, CryptoQuant predicted that the bearish pull would be minimal following the upgrade. This prediction has largely been accurate since Shapella went live on Wednesday.
ETH's price surpassed $2,000 on April 13th and has touched the $2,100 price level several times since then. At the time of writing, ETH is trading at $2,090, representing a rally of over 10% in the past three days.
In conclusion, while the Shapella upgrade has enabled ETH validators to withdraw their staked funds, Binance has announced that processing these requests may take several weeks due to limitations on the Ethereum network. Despite concerns about a potential drop in Ethereum's value following the upgrade, the cryptocurrency has experienced a 10% rally in the days since the hard fork. The future remains promising for Ethereum as it continues to grow and adapt to the ever-changing landscape of the crypto industry.
