The Ethereum blockchain’s Shanghai (or Shapella) hard fork will go live April 12. But if you’ve staked ETH with a staking service or pool, you may get your rewards much later.
There’s only roughly two weeks left until Ethereum’s latest hard fork – which will finally introduce withdrawals to ether staking.
In the hard fork, Ethereum’s execution layer undergoes the Shanghai upgrade, while the consensus layer also undergoes the Capella upgrade.
It's happening 🎊
Shapella is scheduled on mainnet for epoch 194048, scheduled for 22:27:35 UTC on Apr. 12, 2023 📆
Client releases compatible with the upgrade are listed in the announcement below 👇https://t.co/I0hSv9lnjz
— timbeiko.eth ☀️ (@TimBeiko) March 28, 2023
But news upon the Shanghai and Capella upgrade – bundled up and known as “Shapella” to devs – has left many stakers wondering how soon they’ll be able to access their staking rewards.
Sadly, there’s not a one-fits-all answer: depending on how you stake your ether (ETH), you may not be able to withdraw your rewards right away.
Staking 101, recapped for Shapella
People can stake ETH in many different ways, including directly as a validator, or via a staking service.
Before block validation, node validators must lock up 32 ETH into the Beacon Chain. Upon Shapella, ETH rewards will be automatically unlocked for said validators.
But not everyone has 32 ETH to spare to be a validator, which is where staking services such as decentralised staking pools come in. Stakers have the freedom to stake any amount they like into a given service or pool alongside other stakers’ ETH, which the service providers will then ‘pool’ those combined funds to lock it onto the Beacon Chain.
As service providers are the ones who operate the nodes instead, it’s up to them to decide when to release the rewards from the staked ETH.
For solo stakers (or if you’re running your own node validator)
Solo stakers and node validators can access their staked ETH rewards through partial withdrawals and full withdrawals.
Partial withdrawals are the extra profits one earns from rewards after 32 ETH (your earned rewards, excluding your blockchain-locked funds). These rewards from partial withdrawals can be withdrawn immediately, and your validators will still continue to add blocks to the chain.
In the case where you’re running your own validator, you’d have to migrate your validator to include a 0x01 withdrawal credential. If you don’t include it, then you won’t get automatic partial withdrawals.
Full withdrawals consist of the entire balance – your extra profits, and the 32 ETH that you’ve locked to be a node validator. If you do a full withdrawal, your validator will stop participating in the block validation process.
If you want to do a full withdrawal, be aware that your funds won’t arrive automatically after withdrawal, as the validator needs to add itself to the exit queue – taking some time. As such, rewards will be released gradually.
For stakers in decentralised pools or staking services
First things first, you’d have to check with your service provider regarding their timelines, and procedures for staked ETH withdrawals.
As different providers have different ways of operating, you’d have to attentively check in on their announcements to reap the benefits of your staked ETH.
We’ll only be covering a few platforms here, as there’s a plethora of services available to choose from.
Lido has announced that their users who hold stETH wouldn’t be able to withdraw their ETh rewards until their protocol goes through a scheduled upgrade that will happen mid-May.
According to Lido, the delay is due to maintaining proper security within the protocol.
In addition to this, stETH withdrawals won’t launch on mainnet until all audits concerning on-chain code are completed (expected end of April).
Adding another 2 weeks as a safety margin, the current expectation is for mainnet withdrawals to be live around mid May.
— Lido (@LidoFinance) March 14, 2023
According to RocketPool, with their latest Atlas upgrade, you will be able to control whether if they’d like to stop validating, or if you want to continue staking and receive ETH rewards “in a liquid form over the initial 32 ETH deposit on a regular basis,” in a process which RocketPool calls ‘skimming’.
If you’re on a new LEB8 minipool, you’d have any rewards you’ve earned above 32 ETH – through skimming – automatically sent to your minipool while you’re actively staking. These funds would on average arrive around every 4 days on mainnet. As for when skimming can start? It’s not clear yet, as of writing.
However, if you’re on a 16 ETH minipool, you’d have to upgrade your minipool to the new delegate to enjoy skimmed rewards.
As of writing, Ankr hasn’t quite yet publicly published any timelines, but has written about their commitment to security for staked ETH withdrawals with the upcoming Shapella upgrade.
ETH Liquid Staking Derivatives (LSD) like StakeWise have been increasing in popularity – but StakeWise hasn’t yet posted much on their public social media channels regarding reward timelines.
However, StakeWise is planning for a platform upgrade to v3 after the Shapella upgrade.
If you choose to withdraw or unstake, you’d have to do so after StakeWise v3. You’d have to convert into VLTs, and choose between ETH withdrawals, or an osETH mint which will then be swapped for ETH on the secondary market, according to a StakeWise team member.
Coinbase has tweeted that ETH will be released upon request for withdrawal around 24 hours after the Shapella hard fork has completed.
“All unstaking requests are processed on-chain, and we’ll pass the unstaked funds and staking rewards to you once released by the Ethereum protocol,” Coinbase tweeted.
5/ If you’d like to unstake, Coinbase will begin taking unstaking requests about 24 hours after the upgrade completes. All unstaking requests are processed on-chain, and we’ll pass the unstaked funds and staking rewards to you once released by the Ethereum protocol.
— Coinbase (@coinbase) March 15, 2023