Nansen speaks on how there were surprisingly few ETH withdrawals from its staking contract following Shanghai, and how supposed Binance withdrawals in March were somewhat exaggerated.
The Shapella upgrade last month enabled validators to unstake millions of ETH from the Ethereum 2.0 contract, allowing the funds to potentially be sold on the open market. Despite this, the second-largest cryptocurrency actually increased in value after the upgrade. How come?
At Consensus 2023, CryptoPotato sat down with representatives from Nansen, a blockchain analytics company, to discuss how things have looked on-chain since the final phase of the Merge.
Shanghai Defies Expectations
“We knew that entities with exposure to US regulatory, for example, Kraken and Coinbase, where there was clear indication that staking as a business was going to undergo some regulatory challenges – we know those people want to unwind their positions, so that’s a big overhang,” said Jason Xu – Senior Product Manager at Nansen – to CryptoPotato in an interview.
Such services – which provide stakers with a 1:1 convertible liquid token for their locked, staked ETH – are expected to succeed well into the future due to the difficulty for users to stake on their own. “ETH has consistently delivered on their roadmap, the technical roadmap. So I think people are confident in ETH,” he said.
As of May 8, there is over 19.3 million ETH locked away for staking – more than before Shapella had activated. Xu added that many “smart money” investors in crypto, by Nansen’s standards, are mainly holding “different variants of staked ETH.”
FUD vs. Facts: Binance Withdrawals
However, when asked if these reports were true, Nansen Ecosystem Growth Manager Aurélie Boiteux said these claims “might be exaggerating a little bit.” In reality, for both Binance in that particular case as well many other large exchange withdrawals, it was really just Binance “sending to another Binance wallet.”
“We saw a lot of drama on Twitter,” she said, “ and people tend to react really too quickly, maybe just for fear, for example, by fear and anything. But so far on-chain, I don’t recall a really big issue regarding regulatory in that aspect.”
Boiteux refused to provide any specific price predictions for the future. “We do not predict the future, that we try to understand by what’s happened before, what could be a potential price, what could be a potential bear market or bull market, et cetera,” she said.
Xu, however, remained bullish. “My opinion’s to the moon,” he said. “ That’s the politically correct answer I’m going to give.”