The Shanghai/Capella Upgrade
Understanding the historic upgrade that finally enabled Ethereum validator withdrawals in April 2023.
The Shanghai/Capella upgrade was a major Ethereum network upgrade that introduced the ability for validators to withdraw their staked ETH and accumulated rewards. This was the missing piece that made Ethereum staking truly complete and accessible.
Shanghai (Execution Layer)
Enabled withdrawal operations on the execution layer, allowing ETH to flow back to regular Ethereum addresses.
Capella (Consensus Layer)
Implemented the consensus layer changes needed to process validator exits and withdrawal requests.
Beacon Chain Launch
Ethereum 2.0 staking begins, but no withdrawals possible
The Merge
Ethereum transitions to Proof of Stake
Shanghai/Capella Upgrade
Withdrawals finally enabled for validators
Ongoing Withdrawals
Validators can now access their staked ETH and rewards
Partial Withdrawals
Automatic withdrawal of rewards above 32 ETH
Full Withdrawals
Complete validator exit with full stake return
Improved Liquidity
Staked ETH becomes more liquid and accessible
Validator Confidence
Increased participation due to withdrawal capability
Automatic Partial Withdrawals
When a validator's balance exceeds 32 ETH, the excess is automatically withdrawn to the specified address.
• No action required from validator
• Validator remains active
Full Withdrawals
When a validator exits, the full 32 ETH stake plus any rewards are withdrawn.
• Takes several days to process
• Validator stops validating
Important Requirement
To enable withdrawals, validators must have their withdrawal credentials set to an Ethereum execution address (0x01 type). Many early validators still have BLS withdrawal credentials (0x00 type) and need to update them first.
Key Benefits Realized:
- • Increased validator participation due to reduced risk
- • Better liquidity for staked ETH
- • Completion of Ethereum's transition to Proof of Stake
- • Enhanced confidence in the staking ecosystem