Zhejiang Testnet For Ethereum Staking Withdrawal Goes Live

A recent update has revealed an additional development on Ethereum. Besides the much anticipated Shanghai and Capella upgrades coming sometime in March. 

According to an Ethereum developer, the Zhenjiang public testnet for the Shanghai upgrade would allow users to test and evaluate the withdrawal process and network functionality after the Shanghai upgrade.

The developer who goes by Barbabas Busa on Twitter said the Zhejiang public testnet went live on February 1. But users won’t be able to test withdrawals until six days later (February 7) when the Shanghai and Capella testnet go live.

The Zhejiang public testnet is going live tomorrow (1st of Feb 15:00 UTC, 2023). Shanghai+Capella will be triggered 6 days later (at epoch 1350). You will be able to deposit validators, practice BLS change and exit without risk. All links are here: https://t.co/XNlsDIG0cm pic.twitter.com/sKKDJmolt2

— Barnabas Busa (@BarnabasBusa) January 31, 2023

The testnet would allow users to test validator deposits, practice how to change BLS, and master the user interface navigation without risks. 

According to the launchpad documentation, the testnet would mimic a post-merge chain. So its genesis will be in a merged state.

The Shanghai Upgrade To End Locked Ethereum Issue

The upcoming Shanghai upgrade is among the most anticipated events in the Ethereum community and the entire crypto space. It would facilitate the withdrawal of staked ETH. The upgrade would enable the phased release of staked ETH on the Beacon Chain for up to 26 months.

Some people believe the Shanghai update would boost Ethereum staking. Also, liquid staking platforms like Lido might benefit more from the Shanghai upgrade since they offer more yield opportunities than direct staking platforms.

Jack Niewold, the founder of Crypto Pragmatist, a crypto research and analytics firm, believes the issue of locked ETH will end by March after the Shanghai upgrade. Niewold also predicted that being able to withdraw staked ETH would stop the interest that has been accumulating on locked ETH.

Furthermore, the Shanghai upgrade would ensure the release of staked Ether in batches. For withdrawing staked ETH, validators must follow a two-stage process, which includes an exit queue and a withdrawal period. 

The exit queue works under a mechanism that maintains the network stability and security called ‘churn limit’. It increases the withdrawal period if a large number of validators want to exit at the same time. That means it could take a couple of months to achieve a withdrawal if the exit queue is long.

ETH’s Current Market Performance

Presently, about 16.3 million ETH has been locked on the Beacon Chain (Ethereum POS chain), representing 13.5% of the total circulating supply. The dollar value of the locked ETH would be approximately $25.9 billion at the current ETH prices. 

Meanwhile, Ethereum is up over 6.22% over the last 24 hours to be trading above $1,660. It is the second-largest cryptocurrency with a market cap of $204 billion.

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