Ethereum Unleashed: Shanghai Upgrade Unlocks Over 17 Million Staked ETH, Boosting Liquidity

On June 6, 2025, the Ethereum Shanghai upgrade successfully activated, unlocking the ability for stakers to withdraw over 17 million ETH that had been locked since the Merge in late 2022. This pivotal change brings fresh on-chain liquidity and reshapes staking economics across the network.

Upgrade overview

Shanghai (EIP-4895) is the first major post-Merge hard fork, enabling exits of staked ETH and Lido’s stETH. The upgrade also included gas optimizations and minor consensus tweaks to improve block propagation.

Withdrawal details

Validators can now request full or partial withdrawals. Ethereum Foundation data shows over 85% of queued withdrawals completed within 24 hours, with the remaining processed as per the protocol’s exit queue algorithm.

Liquidity impact

Unlocked ETH flowed into decentralized exchanges and lending platforms, boosting DEX volumes by 22% and reducing staking yields from ~4.5% to ~3.8%. Analysts expect much of the ETH will re-stake via liquid staking derivatives, maintaining network security.

Developer perspectives

Core developers celebrated smoother withdrawal logic and gas savings. “Shanghai proves Ethereum’s upgrade path works seamlessly,” said EF researcher Tim Beiko, noting the successful deployment paves the way for future forks.

Future roadmap

Attention now turns to the Dencun upgrade planned later this year, which will introduce proto-danksharding and further cost reductions. Full EIP-4844 roll-out is expected to unlock scalable rollup solutions and accelerate L2 growth.

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