Ethereum's Shanghai Is Nearing, But When Can I Withdraw My Staked ETH?
Even though the Ethereum blockchain’s Shanghai hard fork (also known as Shapella) will go live April 12, you might not receive your rewards immediately if you have staked ETH with a staking service or a staking pool.
The Ethereum blockchain's Shanghai upgrade, or more accurately known as “Shapella,” is only two weeks away, so stakers may start to wonder how soon after the upgrade they can access their rewards from staking.
But depending on how one stakes their ETH, they might not be able to withdraw those rewards immediately.
On Ethereum, there are different ways to stake your ETH – directly as a validator or via a staking service.
Before participating in the block validation process, validators agreed to lock up 32 ETH (currently worth about $58,000) into the Beacon Chain.
But not everyone has 32 ETH lying around, so staking services or decentralized staking pools sprung up, allowing users to stake any amount they liked into that service or pool, and that service or protocol would then pool it together with other stakers’ ETH and lock it into the chain.
Shapella will automatically unlock the ETH rewards for validators.
But in the case of service providers or staking pools, it will be up to them to determine when to unleash the rewards.
If you are a solo staker or run your own validator:
There are two ways in which you can access staked ETH withdrawals: partial withdrawals and full withdrawals.
Partial withdrawals are the excess profits one has after 32ETH (or earned rewards). These rewards can be withdrawn immediately, and your validators will continue to add blocks to the Beacon Chain.
If you are running your own validator, you must migrate your validator to include a 0x01 withdrawal credential. If you don’t install that withdrawal credential, then partial withdrawals won’t happen automatically.
Even though partial withdrawals will be accessible immediately, getting those rewards will also depend on how many withdrawal requests need to be processed. Only 16 partial withdrawal requests can be put into a single slot (which happens every 12 seconds). Depending on how many requests will occur once Shanghai is live, the queue could take hours.
Full withdrawals on the other hand are when you remove the entire balance, including the 32 ETH, from the blockchain. This means that your validator will stop participating in the block validation process. Full withdrawals won’t happen automatically, since the validator needs to send a message to the blockchain to add itself to the exit queue. This takes time and will be released gradually.
If you are with a decentralized pool or staking service:
Those that have their ETH staked with a staking service or with a decentralized pool need to check with their providers on what the timeline is for staked ETH withdrawals.
Coinbase, which runs a staking service, said earlier this month that they will process withdrawal requests about 24 hours after Shapella is complete. “All unstaking requests are processed on-chain, and we’ll pass the unstaked funds and staking rewards to you once released by the Ethereum protocol,” Coinbase said in a tweet.
Lido, the largest liquid staking protocol, shared that its users who hold stETH won’t be able to retrieve their ETH until the protocol goes through an upgrade in mid-May. The reason for the timeline that Lido gave is so that the protocol can go through the proper security checks.
Rocketpool, another decentralized staking protocol, has not confirmed yet when they will allow their users to unstake their ETH.
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So if you are hoping to cash in on any rewards from your staked ETH, make sure to check with your providers when that will happen as that may not occur on April 12. And if you are running your own validator, make sure to install the correct withdrawal credentials.
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