YouTuber Lark Davis posted a video warning customers that 16 million Ethereum tokens worth more than $26 billion may be withdrawn and dumped in the market beginning in March 2023.
However, he states that all of the money will not be unlocked at the same time. Similarly, while many anticipate benefits from selling, Davis claims that not all Ethereum holders will be more likely to sell or dump both.
He mentions that ETH was worth $600 at the time of staking. However, daily limits could take the entire Ethereum validators nearly a year to exit if they wanted to. Furthermore, Davis announces that as part of the staking reward, over one million dollars will most likely be unlocked in three weeks after the unlocking begins.
According to Davis, if holders decide to sell instead of staking after the unlocking, it would indicate shopping for alternatives for crypto traders and merchants.
According to the Ethereum Basis’s ethereum.org website, staking is “the act of investing 32 ETH in activating validator software program.” However, crypto exchanges like Coinbase and specialized websites like Lido allow Ether holders to participate in staking and earn rewards without meeting the 32 ETH minimum.
The platforms can challenge tokens representing customers’ staked ether, also known as liquid-staking derivatives. While the staked ether they represent is locked up and earning interest, the byproduct tokens can be traded or used in different decentralized finance applications.
Even though the Merge occurred in 2022, Ethereum customers began staking ether as early as December 2020 to gain access to the validator software program, knowing that the staked property and any collected rewards would be locked up until a subsequent blockchain upgrade.
Furthermore, Staking Rewards, a knowledge provider, estimates that 14% of all ether tokens are currently staked, representing a market value of nearly $29 billion. Validators will finally be able to withdraw these properties as a result of the Shanghai improvement if they so desire.