Kraken followed the movement of the Ethereum merger with enthusiasm before returning to its customers to inform them of the suspension of one of their services.
Withdrawals frozen for several months
More or less 24 hours after its merger, Ethereum continues to be talked about. As holders, investors and companies recover from the event, some professionals are still waiting for the next update. Companies offering staking services would be particularly impatient and the Kraken exchange is no exception.
Since the Merge Ethereum, things have changed for coin staking. For now, those that have been staked in the Beacon Chain cannot be withdrawn. The update in question, titled Shanghai, is expected to allow users to repossess their tokens. A queuing system should also be put in place to prevent too much resale of these.
However, Shanghai is not expected anytime soon. It would indeed take between 6 and 12 months for the update to be implemented. Enough to force platforms such as Kraken to completely suspend staking withdrawals during this waiting period.
As Kraken specifies, the phenomenon would be collective. It would nevertheless be necessary in order to protect the liquidity of the platforms and not to lead to incidents similar to the bankruptcies of the crypto winter.
After the Ethereum merge, the discovery of the disadvantages
The announcement will still have had the effect of generating discontent within the crypto sphere. Regarding the Shanghai update, Cardano founder Charles Hoskinson wondered if it would not have been possible to merge Ethereum without having to generate such handicaps for users.
The public is also learning about the downsides that come with Merge Ethereum. In addition to the impossibility of unstaking its coins, ETH is seeing its price drop sharply. A situation far from the explosion predicted by some analysts. However, the worries would not stop there for staking. According to a report published by Nansen, more than 70% of blocked coins could lose value after the merger. A hypothesis confirmed by the downward trend in the price of Ethereum. According CoinMarketCapVitalik Buterin’s token is said to have lost more than 8% of its value since the Ethereum merge.
At the time of the establishment of Shanghai, users could therefore have suffered considerable losses, except in the event of a rise in prices. However, according to Nansen, the return of staking withdrawals would not completely resolve the situation. If the queue set up by Ethereum should avoid a precipitous drop in its value, holders could wait up to 300 days to collect their due. This would harm the last on the list, who would see previous users resell their coins and the price drop helplessly.
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Kraken: after The Merge, the platform suspends one of its services – BeinCrypto International
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