Another token frenzy has been sparked by Ethereum’s Shanghai upgrade, with investors betting on the upgrade’s success
According to Bloomberg, speculators are increasingly betting on tokens associated with the upcoming upgrade to the Ethereum network, known as Shanghai.
It is anticipated that the much-anticipated upgrade will take place in March. Holders of Ether will be able to withdraw their staked coins as a result of this.
Several cryptocurrencies have seen significant price increases in recent weeks, just a few months after the notorious FTX implosion, which prompted experts to reconsider their most pessimistic predictions for the still-developing crypto industry.
Investors gave liquid staking apps a lot of love, and the coins of Lido and Rocket Pool saw significant price increases. Ethereum holders can benefit from yield through these apps without having to sell their tokens.
The recent rally is similar to the one that occurred in September ahead of the much-anticipated software upgrade known as the Merge, which enabled the second-largest blockchain to switch to a new proof-of-stake consensus algorithm.
According to Henry Elder, Wave Financial’s head of decentralized finance, people anticipate a rise in adoption following Shanghai.
Since the beginning of November, when the entire cryptocurrency market experienced a massive crash as a result of the collapse of the FTX exchange, the LDO token, which is used as the governance token for the Lido app, has seen an increase of triple digits.
With over $8 billion secured in the protocol, Lido is now the most popular decentralized finance application.
When withdrawals are made possible, about a fifth of the Ether tokens currently in circulation will be staked by the end of 2023.
After Shanghai, it may still take a long time to remove staked Ether from the Ethereum network. The tokens’ liquidity is likely to increase, but there is a possibility that they will become stuck.
Additionally, there is a possibility that speculators who inflated the prices of governance tokens for liquid-staking apps will sell just as Shanghai is about to be implemented.