Navigating the Ethereum Shapella Hard Fork

Ethereum Shapella Hard Fork is a major milestone in the Ethereum blockchain, especially with its migration to proof-of-stake. This upgrade brings several benefits to the network like increased security, improved scalability and higher throughput, but the most important thing is the ability to pay ETH staking rewards.   

To become a validator on the Ethereum network, users must have at least 32ETH. Those who can’t afford that amount of Ether can join shared staking pools like Lido or Rocket Pool. In such pools, rewards are proportionally smaller but still profitable as long as users remain staked for an extended period of time.  

One of the biggest changes for validators introduced in Shapell is the ability to pay rewards for their work, which has not been possible since Merge. Rewards are now paid out to actual validators (instead of being split between them and end users). However, this doesn’t mean that end users won’t see any reward from their staked Ether – it simply means that their reward will come from the pool operators they stake their ETH with via smart contracts instead of directly from the Ethereum protocol.  

Another important feature of Shapella is that up to 1800 validators per day can fully unstake, which would equate to 57,600 ETH (~$113 million). This allows for a gradual release of rewards and prevents serious price drops due to drastic dumps by large investors. Additionally, in each block up to 16 validators can make withdrawals which creates even more liquidity on Ether and helps prevent bank-runs.  

The example below shows how ETH rewards payments are handled in Coinfirm Analytics Platform. 

According to its records, one specific address (0xcfc7E96Be27d836b034b37132052549611341108) received one reward which can be seen in its balance graph on the AML Report. It also affects the overall address balance. 

As this is not a typical “transaction”, this transfer does not have a transaction hash and was not sent from a regular ETH address. 

To handle this, all rewards made after Shapella, appear on Coinfirm Analytics Visualiser under the synthetic address 0x00000000000000000000000000000WITHDRAWALS. 

This shows how Coinfirm Analytics tools keep track of all transaction movements related to Ethereum Shapella Hard Fork, no matter if it comes from or goes into this synthetic address or other ETH addresses associated with participants in the network.