An investor and analyst named Sassal predict that the upcoming ability to withdraw staked ETH will be the most bullish unlock in the history of the cryptocurrency. The rewards involved in the staking could see actually see a surge into the network rather than a decrease. This comes after his previous comment regarding the same where he asserted that ETH staking was deemed to grow bigger.
My general thoughts on why Ethereum staking withdrawals is actually bullish for ETH (clip taken from one of last weeks @thedailygwei Refuel videos) pic.twitter.com/SzaADc6JAK
— sassal.eth 🦇🔊 (@sassal0x) January 9, 2023
Why could this happen?
It is conceivable that more Ethereum will be staked as a result of the incentives that are provided to validators in exchange for keeping the network operational. When staking is enabled, validators will be able to receive incentives in the form of freshly minted ETH for their participation in the consensus process and for maintaining the network’s safety. These benefits will be unlocked when staking is enabled.
This creates an incentive for a greater number of people and organizations to become validators and stake their ETH, which ultimately results in a rise in the total amount of ETH that is staked. Additionally, if the network’s security improves as a result of more ETH being staked, it will become more appealing for users to keep and stake their ETH, which will further raise the total amount of ETH that has been staked.
Hal Press: ETH is ready for an idiosyncratic move
According to Hal Press, there are indications that the Ethereum network is getting closer to being ready for an unconventional step. Hal claims that there are a large number of catalysts available to promote further activity in an environment where ETH activity is already robust. This is specifically a result of the forthcoming launches of Arbitrum and MATIC zkEVM, in addition to the reductions in the value of BLUR and SUDO tokens.
ETH starting to show signs that it is ready for an idiosyncratic move. Plenty of catalysts to drive further activity in an environment where ETH activity is alrdy strong. Arbitrum and MATIC zkEVM launches expected soon. BLUR+SUDO token drops.
— Hal Press (@NorthRockLP) February 3, 2023
Hal is certain that everything will turn out well if more activity is encouraged and the wealth benefits begin to take effect. The positioning has remained clean mostly as a result of Shanghai FUD, which has kept the majority of levered longs on the sidelines. This contributes to the setup as per Hal Press.
They further note that once the funds learn that MATIC recently built a completely new chain (in addition to their existing chain) that is potentially worth more than OP (13B FDV), this will make MATIC appear more appealing and be a great story.
How does staking work?
Staking Ethereum refers to the practice of keeping and locking up Ethereum (ETH) in order to verify transactions on the Ethereum network and take part in the consensus process. This not only helps to protect the network, but it also offers an alternative to the mining method known as proof-of-work (PoW), which is used by a large number of other cryptocurrencies.
When an Ethereum holder “vouchs” for the authenticity of transactions on the network by staking their ETH, they are basically endorsing the legitimacy of those transactions. This procedure is referred to as “validation,” and those stakeholders who take part in the validation process are termed “validators.”
Validators are given freshly minted ETH as a reward for their involvement, but they are also subject to penalties if they engage in harmful behavior or go offline. Validators get prizes for their participation. A minimum quantity of ETH is needed in order to engage in staking, and the ETH that is staked may be “unstaked” when a certain length of time has elapsed.
In a nutshell, staking on Ethereum enables owners of Ethereum to receive rewards while simultaneously making a contribution to the network’s continued strength and reliability.