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 near-eight-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 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 decentralized blockchain platform founded by Vitalik Buterin in 2015, allows developers to create decentralised applications (dApps) and smart contracts. It ranks as the second-largest cryptocurrency platform by market capitalisation, following Bitcoin.
Ethereum upgrades, often called “hard forks” or “network upgrades,” entail modifications to the Ethereum protocol or the Ethereum Virtual Machine (EVM), which operates smart contracts.
At CoinDCX, Ethereum gained more than 6% a day after the upgrade.
The exchange said that its on-chain data showed that there was a significant increase of nearly 100,000 ETH tokens staked on the Ethereum blockchain on April 14, marking the largest one-day increase in almost two months.
“This suggests that rather than withdrawing staked ETH to cash out, a significant portion of investors view the successful Shapella upgrade as an indication to stake their Ether tokens,” said Thukral of CoinDCX.
The upgrade sets the stage for a transition to a proof-of-stake (PoS) consensus mechanism, replacing the existing proof-of-work (PoW) system.
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