Possibility of Ethereum Dump in 2023
Davis adds that if holders decide to sell the coins, it's a good opportunity for buyers. Although, he also mentions that all the coins will not be unlocked at the same time, and not all Ethereum holders will be likely to sell or dump either. ETH was valued at $600 at the time of Staking, and it would take the Ethereum validators almost a year to exit if they wanted to due to daily limits.
Staking and Unlocking of Ethereum
According to Davis, over a million coins will be unlocked in three weeks after the unlocking starts as part of the staking reward. The Ethereum Foundation's website defines Staking as "the act of investing 32 ETH in activating validator software." Platforms such as Coinbase and Lido allow holders of Ether to engage in Staking and collect rewards without satisfying the 32 ETH minimum.
The platforms can issue tokens representing users' staked Ether, also known as liquid-staking derivatives. While the staked Ether they represent is locked up and earning interest, the derivative tokens can be traded or utilized in other decentralized finance applications. Staking Rewards, a data provider, estimates that 14% of all ether tokens are currently staked, representing a market worth nearly $29 billion.
Staking Since December 2020
Ethereum users started staking Ether as early as December 2020 to gain access to the validator software, knowing that the staked assets and any collected rewards would stay locked up until a subsequent upgrade to the blockchain. The Shanghai upgrade will finally allow validators to withdraw these assets should they want to do so.