Thread by @christine_dkim

Ethereum developers are targeting March 2023 for the activation of Shanghai and staked ETH withdrawals. In my latest report, I give a detailed overview of how staked ETH withdrawals will be enabled on Ethereum. Here's the tldr🧵

(Thread inspired today by @kellyjgreer 👑)

@kellyjgreer All validators wanting to withdraw their staking rewards will have to ensure their withdrawal credentials are updated to the new “0x01” format. This is also a requirement for validators who want to exit, stop validating, and withdraw the full balance of their staked ETH.

@kellyjgreer According to @benjaminion_xyz, an Ethereum core developer and product lead for CL client Teku, there is roughly 302,154 validators with 0x00 credentials, and 186,722 with 0x01 credentials on the Beacon Chain.

@kellyjgreer @benjaminion_xyz Once Shanghai is activated, withdrawal credential changes will start to be processed on the network in a similar manner to withdrawals. The network can only process a maximum of 16 partial or full withdrawals every block, which is produced every 12 seconds.

@kellyjgreer @benjaminion_xyz Similarly, the network will only be able to process a maximum of 16 withdrawal credential changes per block. This means it will take about 100 hours for the network to run through and update the withdrawal credentials for the entire validator set of Ethereum.

@kellyjgreer @benjaminion_xyz For validators whose withdrawal credentials are already in the 0x01 format, the network will automatically sweep their CL reward balance to their specified EL address with no additional action required by validator node operators.

@kellyjgreer @benjaminion_xyz Every 12 seconds, the network scans through the active validator set by validator index number. Developers are currently discussing bounding the network scan for withdrawals to a maximum of 1,024 validators at one time. More info about bounded scans here: galaxy.com/research/insig…

@kellyjgreer @benjaminion_xyz Based on the number of active validators on Ethereum today (that is, 497,138 active validators), the scan for withdrawals should almost always result in the maximum number of 16 withdrawals being processed per block.

@kellyjgreer @benjaminion_xyz All Beacon Chain withdrawals will be processed as system-level operations on Ethereum that are pushed to the Ethereum Virtual Machine (EVM) instead of transactions that are first processed by the EL.

@kellyjgreer @benjaminion_xyz Withdrawals will not be identifiable as a normal user or smart contract-initiated transaction on the blockchain. There will be no gas costs associated with withdrawals.

@kellyjgreer @benjaminion_xyz A full withdrawal of a validator’s staked ETH balance is first subject to the same churn limit as new validator entries, meaning there is a maximum of 7 validator exits that can be processed on the Beacon Chain per epoch or 6.4 minutes.

@kellyjgreer @benjaminion_xyz Once a validator has successfully gone through the exit queue, they are placed in the withdrawals queue. Again, full withdrawals will be processed alongside partial ones.

@kellyjgreer @benjaminion_xyz No action is required by validator node operators to initiate withdrawals other than making sure their withdrawal credentials have been updated to an 0x01 format.

@kellyjgreer @benjaminion_xyz The existence of 1,094 exited validators on Ethereum suggests that there will likely be at minimum 1,094 full withdrawals processed and >35,008 ETH un-staking from the Beacon Chain shortly after the activation of Shanghai.

@kellyjgreer @benjaminion_xyz For more information about staked ETH withdrawals, read my latest report on galaxy.com

galaxy.com/research/insig…