This is something that has been able to fly under the radar. I reported back after the Merge that there was some difference of opinion on when Ethereum would be unstakable. And it looks like one side apparently has won out internally over at Ethereum.
The Eth2.0 staking opened up with the launch of the Beacon Chain on December 1st, 2020. The price of eth back then was around $600. But if you had any foresight, you would have bought your $ETH in the two months leading up to the launch of Beacon Chain. Then the price where much lower, sitting at around $350.
In the lead-up to the Merge, it was made clear, even if there where some misinformation out there at the time, that you would not be able to unstake your $ETH at the same time that Eth2.0 launched, aka the Merge happened. Ethereum moving away from a Proof of Work to a Proof of Stake network. It was stated that the unstaking would be unlocked approximately 6 months after. Coming with the Shanghai update.
And I reported as much in the wake of the Merge, to try and keep people up to date and kill off any misinformation. Meaning that if you staked Ethereum, you should know what to expect. At the same time, I reported on the fact that there where also talk among the developers that there where no timeline for the unstaking. Despite the opposite information being stated in several places.
The unstaking has since been a topic for discussion among the developers.
When we now jump forward to the now and take a look, it appears that the developers that were pushing for the removal of the unstaking from the timeline have won out. As this has been now been removed from roadmaps and info sources.
I find this to be very worrying for several reasons. The main being that when you ask people to commit financial resources to something, it should be clear from the start the terms of the commitment. And this, to me, is looking like a very classic “moving the goalpost” type of scenario.
The second is that it now will put doubt on other things the Ethereum developer says will be done. This harkens back to the old problem of postponing the Merge time and time again. That led many to believe it would be postponed yet again. But as we know, that was not the case.
This also shines an unfavorable light on Ethereum in that it is starting to act more and more like centralized entities like Celsius, FTX, and the ilk. We can look at the whole issue with the SEC trying to take over Ethereum because they argue that the majority of transactions are done on US soil, and that makes it theirs to control and regulate. This is because of the few options available for hosting nodes on the Ethereum network. Not to mention the whole issue with censoring Ethereum addressed connected to Tornado Cash, the crypto mixer.
The way I see it, there are a few reasons for the removal of the unstaking, and perhaps having all staked Ethereum be locked in perpetuity. One of these reasons ties into the transformation from decentralized to centralized I mentioned above. That is the fact that having a ton of staked $ETH will make it look like the actual value of Ethereum is higher than it is. Simply because it is locked, it is acting like a guarantee the value will not fall under a certain level.
This is something that also is very appealing to institutionalized money, Aka the big money. Over the last year, we have seen a lot of this money flow into crypto and out again with the winter. With the merge and a lot of $ETH locked in staking, Ethereum is putting it in the position of the premier crypto for big money. With them now being “environmentally” friendly.
Stopping a bank run. This is most likely one of the more important aspects of keeping the staked Ethereum locked. What I mean by this is if we look back at when the staking started. The believers in Ethereum have definitely put in a lot of $ETH from the stars as soon as staking became available with the Beacon Chain.
And as I said, these $ETH which probably have been bought at a sub $400 price, meaning that even at the current low price of $ETH, it is a 3x. And a lot of capital gains that people most likely are ready to unstake and put to work for them. And this would probably create a similar scenario to a bank run on Ethereum. Something they most definitely would not want to see happening.
But the main reason why we probably won’t see the unstaking become available to us any time soon, I would argue, is the very fact that Ethereum now is a Proof of Stake network. And that would mean if there were to be a bank run on Ethereum, or a lot of people simply felt like unstaking their $ETH, it could very well crash the whole chain and potentially kill it. And I think this is the main reason the developers have argued and why the unstaking date has been removed.
I have seen some speculating that it has merely been removed because it is taking longer than expected to implement. If it is removed, it simply means the timeline for it is 6–12 months away. I would argue that this is just wishful thinking. And we probably need to come to terms with the fact that there most likely will not be any unstaking of $ETH in the foreseeable future.
This means that you should think twice and maybe thrice before staking any further $ETH. Not because it is bad to do so. But because you should be made aware of the fact that you might not be able to access these funds for a long time, perhaps never.
Personally, I think this whole Ethereum transformation to a centralized entity is pretty worrying. And a trend I very much would like to see reversed. The things they are currently doing, removing the ETA, censoring wallets and propping up $ETH´s value artificially. That is something I would previously have associated with a centralized entity like Celsius.
In order to stop or even reverse this trend. I would argue a good step in the right direction would be a clear update from the developers behind Ethereum when or if unstacking will be back on the menu. It should also be good if they would clarify just exactly how much “power,” for a lack of a better word, the developers have over Ethereum. I would argue that if Ethereum is a centralized entity, just come clean about it. Stop with the whole playing both sides thing.
What are your thoughts on the fact Ethereum has silently removed the unstaking timeline from the roadmap and the information? Do you think I am wrong with my assessment of the reasons why, or have I perhaps overlooked some arguments? If so, please let me know in the comment section down below. I am looking forward to reading your thoughts on the topic.
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