According to a statement made by Coinbase on the Capella and Ethereum Shanghai update, the exchange will begin accepting unstaking orders roughly 24 hours after the upgrade is finished. The Shanghai update is now being tested on the testnets for Zhejiang, Sepolia, and Goerli. The timing of the mainnet update will be decided by the Ethereum professional developers at a session on Thursday. Users will be able to remove their $ETH stakes after the Shanghai update. The unstaked $ETH and holding incentives will be sent to customers by Coinbase when the Ethereum protocol has completed processing.

1/ Ethereum’s Shapella Upgrade is almost here. The upgrade will enable unstaking for the first time since ETH staking was introduced in December 2020. Here’s what you need to know. 🧵 pic.twitter.com/7J9mlCUsXO

— Coinbase 🛡️ (@coinbase) March 15, 2023

In September, the Ethereum Merge Transformed the Network’s Proof-of-work Algorithm to Proof-of-Stake

The network changed from proof-of-work to proof-of-stake as a result of the Ethereum Merge in September 2022, making it safer, more energy-efficient, and more suited for introducing new scaling methods. Users couldn’t, however, yet remove their ETH from staking. Stakeholder holdings were locked up even if Ethereum’s execution layer and beacon chain merged officially in September 2022.

But now that Ethereum has upgraded its Goerli testnet, the real Shapella launch is expected to happen by about the middle of April. According to Coinbase, unstaking requests will be made available to all users at once, and they will be sent to the Ethereum network and queued according to when they are received. According to the company, staking requests are handled on-chain, and they simply serve as a “conduit” for transferring unstaked ETH to customers when the protocol releases it. Due to the promise of recovery later, this enables stakers to essentially exchange ETH while it’s still locked up.

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Around 24 hours after the update is finished, customers’ Coinbase accounts will be allowed to submit unstaking requests. Customers can still assume a wait after making the request. The exchange advised customers to exercise patience. The business estimates that following the change, processing requests for unstaking on the Ethereum network may take weeks to months. Coinbase offers its users a liquid staking alternative called cbETH as a variant of pledged Ethereum on the platform to compensate for this.

For Staked ETH, Coinbase Now Offers a Return of 6.0% APY

Users of Coinbase will get all of their staked ETH in addition to earned staking incentives after unstaking requests have been processed on-chain and issued by the Ethereum protocol. Unlike Coinbase, which will begin processing withdrawal requests one day following the Ethereum Shanghai-Capella upgrade, staking provider Lido has announced that it would delay initiating staked ETH withdrawals until mid-May until on-chain code audits are complete to protect user privacy.