The software upgrade was set to unlock ether worth over $30bln which investors had deposited on the Ethereum blockchain in return for interest
Crypto currency investors are facing hold ups to withdraw funds deposited on the Ethereum blockchain following its major software upgrade, underlining constant issues for Ethereum which intends to have the technology widely used for instant payments.
The software upgrade, known as “Shapella,” was set to unlock ether worth over $30bln which investors had deposited on the Ethereum blockchain in return for interest.
Ether reached more than $2k for the first time since August 2022 on Thursday.
Till Wednesday’s upgrade, investors could not withdraw funds they had deposited in this way, called “staking”, on the Ethereum blockchain.
As of Thursday, ether worth nearly $1.4bln was stuck in a withdrawal queue, according to blockchain data firm Nansen.
The hold ups are an example of the restrictions in the transactions that Ethereum can process, underlining its potential drawbacks as it attempts to become a widely-used financial infrastructure.
The hold ups are because of restrictions in the amount of transactions the blockchain can process, Nansen analyst Martin Lee told Reuters. It can process around 1,800 validator withdrawals, or exits worth 57,600 ethers per day, Lee said – that is nearly $115mln.
The restrictions on validator withdrawals were in place because of security purposes, he said.
Ethereum has become popular for offshoots of the crypto market like the so-called DeFi or Non Fungible Tokens, but it has yet to become used in mainstream payments, finance or commerce.
Lee stated the accumulation will possibly take weeks to clear, following which depending on what the average daily “unstaking” volume is, it would take only hours or a couple of days.
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