Nansen: Ethereum Status Quo - On Chain Data Analysis after Shapella Upgrade

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit.

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Source: MarsBit

Key points

Currently, there are 19.3 million ETHs (including rewards) on the beacon chain, which is equivalent to the number of ETHs on the beacon chain during the Shapella upgrade period. This means that so far, its impact on the network has been zero.

Full extraction has exceeded partial extraction and now accounts for 59.2% of all extracted ETHs, while partial extraction accounts for 40.8%.

Kraken has the highest withdrawal of 647kETH, accounting for approximately 26.3% of all ETH withdrawals since the upgrade due to recent regulatory crackdowns, followed by Coinbase, Binance, and Lido.

Approximately 150kETH (0.78%) is planned to be extracted on the beacon chain, while 99.22% of ETH is still pledged. Coinbase currently holds the largest ETH in the withdrawal queue (accounting for 40% of the total).

The expected ETH entering circulation from the beacon chain is currently 25k-35kETH per day.

introduce

Last month's implementation of Shapella was the most anticipated event for Ethereum and its community since its merger, mainly due to the use of ETH withdrawals pledged from the beacon chain. This incident sparked a debate over whether the ecosystem is bullish or bearish. Bears believe that the entry of unsecured ETHs into circulation will lead to sustained selling pressure, while bulls believe that the risk of not being able to withdraw is eliminated, leading to more deposits.

introduceShapella

On chain data and statistical data to better understand the flow of ETH withdrawals to deposits,

1. Which entities have already exited?
2. Where does the extracted ETH flow to
3. Breakdown of current withdrawal activities and withdrawal queues
4. Estimated time required for withdrawal under current circumstances,
5. And predict the number of ETHs leaving the beacon chain every day.

Overall, this report provides a deeper understanding of the current state of the Ethereum network and helps to measure potential selling pressure and ETH traffic dynamics from investors and entities.

Details of Release of Pledge Status

Our definition comes from the deposit and withdrawal process, as shown in the above figure:

Total locked ETH: The current ETH on the beacon chain (including rewards and waiting for withdrawal ETH)+the ETH that has been deposited into the main network beacon chain deposit contract but has not yet been recorded in the beacon chain.

ETH waiting/planned withdrawal: ETH currently scheduled for withdrawal. This includes

• Reward (0x01): Balance of all validators who have upgraded to 0x01 withdrawal voucher> Verifier of 32ETH.
• Active exit: All validators with a balance of 32ETH initiated an exit, but have not yet passed the exit queue and have reached the exit period.
• Exit Unreduced: The balance of all unreduced validators who have already exited the queue but are still within the 27 hour exit delay and have not yet exited.
• Reduced exit: All validator balances of validators who have already exited the queue but are still within their approximately 36 day exit delay and have not yet exited.
• Extractable: The verifier balance of all verifiers who have passed their withdrawal delay (now withdrawable) and can be included in the scan.
• Withdrawable: All validator balances (now withdrawable) that have been delayed through withdrawal and can be included in the cleanup.

Partial/Reward Withdrawal: All Balances> The complete exit of 32ETH has already "arrived" on the main network.

Full/Principal Withdrawal: All withdrawals with a balance of 32ETH have "arrived" on the main network.

Exit queue: The time from the start of exiting to entering the queue (~25 minutes)+the actual exit queue (variable)+the exit delay (27 hours).

Advanced Post Shapella data points

During the upgrade period, including rewards, there were approximately 19.3 million ETHs (approximately 19.1% of the circulation supply) on the beacon chain. Since then, a total of 2.43 million ETH has been extracted, while 2.2 million ETH has been deposited and 102kETH has been burned, resulting in approximately 130kETH entering circulation. Including unallocated rewards, there are still 19.3 million ETHs pledged on the beacon chain, which means that Shapella's net impact on ETHs is zero so far.

There are 600000 active validators protecting the network. However, currently there are approximately 4.5k validators in the exit queue (actively exiting), which means they are waiting for all withdrawals. Due to the matching between the number of activated validators and the number of exited validators, and the relatively stable total ETH on the beacon chain since Shapella, the upgrade has no impact on the Ethereum network.

Extracted ETH details

In the first two weeks after the Shapella incident, partial withdrawals accounted for the majority of all withdrawals ETH. This is because each validator scan (~days) will automatically process a partial withdrawal, and the only requirement of the validator is to provide the withdrawal address. On the other hand, validators who want to fully withdraw must choose to exit the network and wait in the exit queue, which may take several weeks (as it is). Full extraction has exceeded partial extraction and now accounts for 59.2% of all extracted ETHs, while partial extraction accounts for 40.8%.

Entity with the most withdrawals

So far, Kraken has been the entity with the most withdrawals, totaling over 647kETH, with the majority being principal tokens. Since the upgrade, Kraken's withdrawal volume has accounted for approximately 26.3% of all ETH withdrawals. This is due to the recent crackdown on the exchange's pledge services by regulatory authorities, forcing them to return the pledged ETH to depositors on their platform. Kraken pledged approximately 1.4 million ETHs through their services, which means that approximately half of the ETHs are still on the beacon chain.

After the recent round of withdrawals, Coinbase is now the second largest entity with a withdrawal volume of approximately 344000 ETH.

Although Lido currently ranks fourth in terms of withdrawal volume, all withdrawals come from pledge rewards, which are automatically processed by each verifier scan. However, please note that LidoV2 will support pledge withdrawals and no license node settings, and is planned to be released on the main website in mid May.

Kraken contributed 26.3% of the ETH extracted from the beacon chain. However, if only the amount of principal withdrawn is considered, this proportion is much larger, with exchanges accounting for 35.9% of the 1.44 million ETH principal withdrawn so far. Other notable main ETH extractors include Binance, Coinbase, and private trading miners: 0xffd, accounting for 13.3%, 12.5%, and 5.44% of the extracted main ETH shares, respectively.

Withdrawal activities

Withdrawal queue

The vast majority of ETHs bet on the beacon chain (99.22%) have no plans to be extracted, while only 150000 ETHs (0.78%) are waiting to be extracted from 4500 different validators. The composition of ETH withdrawals in different categories is as follows:

Most of the ETHs in the withdrawal queue come from validators who completely withdraw their rights (active withdrawal, possible withdrawal, and unreduced withdrawal), some of which may be due to upcoming selling pressure. On the other hand, ETH extracted from exchanges such as Kraken (which accounts for a significant portion of the full withdrawal) may not be sold as depositors may wish to re-enter through DeFi or other stock pledge solutions.

Current withdrawal waiting time

Partial Exit

Due to the automatic processing of pledge rewards for each validator scan, eligible validators (those with 0x01 credentials) do not need to take any further action.

16Withdrawal queue115,200604.32.15

Exit completely

Exit completely4epoch(~25)18001.16256epoch(~27)3.31

Exit the top ranked entity in the queue

Coinbase accounts for 40% of all ETHs in the current withdrawal queue, followed by Kraken, Binance, and CoinbaseCustomer, accounting for 7.42%, 5.36%, and 5.15%, respectively.

LidoETHETHCoinbaseWithdrawal queue2.58%ETH

The largest depositor since Shapella

The table above shows the main deposit entities since Shapella. As expected, top tier entities include LSD projects and pledge services, with Lido leading with deposits of nearly 412000 ETH. Due to Shapella being positive, Lido pledged ETHdelta on the beacon chain. At the time of writing, Lido's lifetime withdrawal amount was 272000 ETH, while the deposit amount was 412000 ETH.

What do withdrawals use their ETH for?

The above chart shows a breakdown of the first iteration where the extracted ETH was sent, which provides an understanding of what the withdrawing party has done with their ETH and helps measure some immediate or short-term selling pressure on the withdrawing party.

So far, 72.9% of the ETHs extracted from the beacon chain have been sent to CEX. However, most of them are extracted by CEX to themselves. This means that most of the ETHs sent to CEX are not primarily for sales, but rather for internal operations of the exchange. In contrast, the number of ETHs sent from withdrawals to DEX only accounts for 1.23% of the total proportion. According to Nansen, 19.2% of exit ETHs are classified as "other categories", which means they are sent to all other types of addresses instead of being marked as CEX, DEX, Stacking, or DeFi, and approximately 6.05% of exit ETHs are sent to re pledged.

Although dividing the extracted ETH into complete extractors (addresses for extracting principal ETH) and partial extractors (addresses for only extracting pledged rewards) depicts a completely different picture.

The vast majority of ETHs (83.1%) from complete exports are directly sent to CEX. Although 12.6% of ETH extracted from this queue was sent to other miscellaneous addresses, only 2.64% of ETH was re pledged.

ETH50.8%CEX23.7%22.6%()Partial ExitETH

Matters to consider

Although this analysis provides the idea of extracting ETH flow direction, the query only indicates the "first hop" from extracting ETH address to extracting ETH receiving address, and only tracks the label of the receiving address. Therefore, this may lead to overestimation and underestimation of different categories.

As shown in the above figure, 89% of all transactions classified as CEX were reshuffled by CEX in their wallets, which reinforces the claim that most extracted ETHs are not for sale. Therefore, only 11% of CEX transactions can be considered as potential selling pressure.

When decomposing CEX transfers into complete and partial withdrawals, the percentage of CEX transfers that have been reshuffled for complete withdrawals is much higher than for partial withdrawals. Specifically, 89.8% of the 83.1% CEX transfers from full withdrawals were actually CEX reshuffles, while only 24.1% of the 23.7% CEX transfers from partial withdrawals were CEX reshuffles.

In contrast, the pledge may be underestimated. If Coinbase sends some of their ETHs to another Coinbase wallet for re pledge, the first step will only classify this transaction as a CEX transfer, not a re pledge. In addition, the recipients of Kraken's pledge service will not appear here, as they must first be transferred to other places.

Forecast daily withdrawals

In order to predict selling pressure, our daily estimates are calculated as follows:

Exit completely(Active ExitingExited UnslahedExited Slashed Withdrawal Possible)()27

Exit completelyepoch()+(0)

This provides an estimated number of main ETHs that are expected to be extracted per day based on current network statistical data.

Assuming that the number of pledge rewards extracted every day is constant. This is calculated by viewing the current number of outstanding rewards and the time required to clear all rewards. We estimate the average reward for each epoch and assume that this is a constant for reward payment.

By combining the estimated number of main ETHs extracted per day with reward payments, an approximate value of the total number of ETHs expected to leave the beacon chain per day can be obtained.

Therefore, the distribution of ETH extracted daily is shown in the figure above. Based on current network statistics, we can expect that today there will be~29kETH entering the main network from the beacon chain, reaching a peak of~35kETH on May 9th, and then decreasing. This daily estimate can be used as the upper limit for potential selling pressure in the short term. As evaluated in the previous section, not all withdrawn ETHs will be immediately sold to the market.

Please note that for the day, the estimated selling pressure is usually smaller than the actual quantity, as this model shows future withdrawals. For example, if the day is "15 hours ago," then compared to the entire 24 hours tomorrow, the remaining time today may have less money to withdraw.

Limitations of the model

The current model only considers the validators in the current exit process, rather than predicting how many validators will exit in the future, and only evaluates based on current on-chain statistical data. In addition, the model cannot predict the number of ETHs to be sold on a certain day, as withdrawals may not sell immediately, but rather serve as an estimate of the number of ETH withdrawals that may be sold on a daily basis.

conclusion

conclusionETHETHETH

In addition, the vast majority of withdrawals come from exchanges (approximately 69.3%). This includes Kraken, which withdrew due to an agreement with the US Securities and Exchange Commission to cease its pledge business (accounting for 26.3%). Other exchanges may have exited due to previous illiquid products, or simply for the purpose of reshuffling with no apparent intention to sell. In the end, withdrawals have been minimal and have so far matched the inflow of funds, indicating strong overall investor confidence in the network and the assets themselves.

Visit our public ETHShapella upgrade dashboard here.