Staking Tsunami Unleashed: Ethereum's Shanghai Upgrade Ignites Unstoppable Unstaking Movement

The Shanghai upgrade for Ethereum went live on Wednesday evening, enabling those who staked their Ether ETH/USD to initiate the unstaking process.

According to on-chain data tracked by Rated network explorer, Kraken accounts for 62% of the exit queue breakdown, leading the validators' rush to unstake, Coindesk reported.

Parsec Finance revealed that the number of validators in the exit queue has exceeded 15,000 at the time of writing.

Kraken's dominance in the unstaking queue is not surprising, given the legal issues it has faced with the Securities and Exchange Commission (SEC).

In February, the SEC deemed Kraken's staking offerings to be unregistered securities, while other staking programs were unaffected.

The SEC stated in a February release, "The complaint alleges that Kraken touts that its staking investment program offers an easy-to-use platform and benefits that derive from Kraken's efforts on behalf of investors, including Kraken's strategies to obtain regular investment returns and payouts."

Kraken eventually settled with the SEC for $30 million.

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Despite the Shanghai upgrade, Ethereum's protocol and its native token have been only marginally affected.

On-chain data suggests that very little Ether has been withdrawn, with only a -0.25% change in staked Ether, according to Nansen.ai data.

In March, CryptoQuant noted that 60% of all staked Ether is held at a loss and predicted that Ether's selling pressure would be low after the Shanghai upgrade.

Andrew Thurman of Nansen mentioned on Twitter that "the majority of withdrawals are [addresses] withdrawing their rewards, not their rewards and full stake."

More recent data from Nansen shows that the average price of staked Ether on Lido is worth $2,552.

Liquid staking solution Lido accounts for approximately 31% of all Ether deposits.

The data revealed that 4.35 million Ether, or about 24%, is staked at above $3,000, a price not seen since April 2022. As of Thursday afternoon, Ether is trading at around $2,000.

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