Indian crypto investors have started showing interest in Ethereum (ETH) following the highly anticipated Shapella upgrade, which resulted in a surge in transaction volumes in the digital asset last week across major local cryptocurrency exchanges.
At Wazir X, the transaction volume for ETH grew from $52,000 on April 9 to $3,75000 on April 14, recording a neareight-fold increase.
Another top exchange, CoinDCX, said that its ETH volumes had spiked significantly — by 55% — on the INR trading pair over the last few weeks.
According to the exchanges, the transaction volumes of ETH decreased over the weekend, but this is a common trend in the crypto markets, which usually experience lower volumes during weekends. “We anticipate an increase in momentum starting from this week,” said Minal Thukral, EVP-Growth, CoinDCX. Ethereum has been up 11.73% in the last 7 days, touching $2,076 on Coinmarketcap at 5 PM Mumbai time on Monday.
On April 12, the Ethereum blockchain underwent simultaneous “Shanghai” and “Capella” upgrades while operational. The Shanghai upgrade primarily impacted Ethereum’s (ETH) Execution Layer, while Capella targeted the Consensus Layer. The implementation dubbed “Shapella”, is expected to enhance the network’s performance, security, and efficiency.
The execution layer creates blocks of transactions and passes this data to the consensus layer, and the consensus layer then adds the blocks of transactions to the Ethereum blockchain. The combined upgrades enable rewards earned through staking to be distributed to validators and enable validators to fully exit, unlocking their entire staked balance.
The upgrade is the network’s most significant milestone since the Merge took place in September 2022, marking the completion of Ethereum’s transition from proof-of-work to proof-of-stake.
The upgrade allowed users to withdraw billions of dollars in Ether, the native token of the Ethereum network, and the network recorded a hefty inflow of deposits, touching a yearly high of $2,129. Staking in crypto involves holding and locking up a certain amount of cryptocurrency to participate in the network and earn returns akin to a traditional bank FD.
Investors were fearing that Ether holders would quickly withdraw their staked tokens, but fresh deposits helped sustain the staking balance for a couple of days. But lately, withdrawals from Ethereum staking contracts have exceeded deposits. Indian investors said that Ethereum holders now have more confidence to stake their tokens after the Shanghai upgrade as it will allow them to unstake their ETH after a 14-day lock-in period from that day.
“Unlike other Smart Contract Blockchains, the percentage of staked tokens is only 15% in Ethereum, which is expected to rise from here on. Cardano has 69% of ADA tokens staked, Avalanche has 54% AVAX staked, Solana has 71% of SOL staked,” said Ashwini Nadar, a Mumbai-based software professional and avid crypto enthusiast.
Ethereum, a decentralised blockchain platform founded by Vitalik Buterin in 2015, allows developers to create decentralised applications (dApps) and smart contracts.
Source: The Economic Times, Forbes