Despite Ethereum's well-designed model to stabilize the network, estimating the time required for withdrawals is often overwhelming with different methods and scattered all over the Internet. Sensing this strain on stakeholders, 21Shares pioneered a standardized methodology and algorithm to provide a real-time estimation for withdrawals on the Ethereum network. Our mission is to make crypto easy and accessible, as such we’re pleased to announce our partnership with Blockdaemon and Metrika to release the 21Shares Ethereum Withdrawal Simulator (EWS) interface powered via our API.

 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/EWS_blockdaemon_preview_6e02b0fd83_9aaed54062.png) 

**TL;DR:** 

* **The average investor struggles to estimate how long it will take to withdraw** due to the accessibility of on-chain data and the lack of a real-time and interactive interface
 

* **Now, stakers and investors can better plan for liquidity and risk management** by accessing the simulator and estimating the time required to withdraw from the network**


**Background:** 

Staking was introduced to Ethereum in December of 2020, eventually followed by the Shanghai upgrade in April of 2023. Since then, [Ethereum has processed over 6M withdrawals, with 3M ETH ($5.6B](https://dune.com/21shares_research/ethereum-staking-and-withdrawals)) withdrawn. However, there is a daily limit to the number of validators that can exit on the network. While this helps to avoid bank runs, it leaves stakers wondering how long they’ll have to wait to withdraw. 

The more validators looking to exit, the longer it can take to withdraw. That number peaked on April 15 at 22.2K exits, a process that took approximately 19 days. An estimated timeline is useful, but may not provide investors with the details they want to make an informed decision. 

The 21Shares Ethereum Withdrawal Simulator allows investors to access on-chain data to calculate the date of receiving both the principal and reward from ETH staking.

**Methodology:**

**1. Types of Withdrawals**

| **Partial Withdrawal** | **Full Withdrawal** |
|------|------|
| Only staking rewards will be withdrawn | Both staking rewards and principal will be withdrawn |
| Automatic process | Validators need to raise an exit request manually or get slashed |
| Still an active validator after partial withdrawal | Will exit and no longer validate the network after full withdrawal |
| Takes a shorter time than full withdrawal | Takes a longer time than partial withdrawal |

 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/Simplified_Flow_Chart_b53744a556_8b58818bf5.jpg) 

**2. Queues for Withdrawals**

For full withdrawals, exiting validators must first go through the exit queue. With 602k validators, 9 can exit every epoch (2025 validators per day). After exiting the network, exited validators must wait for 256 Epoch (~27.3 Hours) if they are unslashed so that the network can flag them as “withdrawal possible”. The last step is going through the withdrawal queue, in which the network can process 16 withdrawals per block (115,200 withdrawals per day, assuming no missed block). 

For partial withdrawal, the eligible validator will go through the withdrawal queue directly together with other exited validators that have been flagged as “withdrawal possible”

**1. Limitation of the Methodology**
 
* The estimation is only applicable to unslashed validators
 
* Validator Index is not considered when calculating the time required in the withdrawal queue
 
* Using historical number of missed blocks as a discount in the number of withdrawals that can be processed per block in the withdrawal queue
 
* Missed Epoch has not been taken into account for calculating the time required to exit in the exit queue as there was no missed epoch since the merge

Enabling people to access core features of crypto will help drive mass adoption. That’s why we’ve wrapped this methodology in a proprietary API, making it easier for any developer to use it in their applications. It powers the EWS in partnership with Blockdaemon, but that’s just the start. By sharing access with more teams, we can work together to make crypto more accessible to more people. If you want to partner to lower the barrier of entry, please give us a shout at partnerships@21.co.

**Closing Thought:**
 
The industry needs a better way to estimate the amount of time required to withdraw staked ETH from the network, and that’s why we’re so excited to release in real time the [21Shares Ethereum Withdrawal Simulator](https://21shares.com/research/onchain-insights-4). It’s live now, so you can try it out on [Blockdaemon](https://www.blockdaemon.com/shapella).

**Disclaimer:**

This document is not an offer to sell or a solicitation of an offer to buy or subscribe for securities of 21Shares AG (21Shares). Neither this document nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Nothing contained herein represents investment advice and investors should take their own independent advice. 

This document and the information contained herein are not for distribution in any jurisdiction in which the distribution or release would be unlawful. This document does not constitute an offer of securities for sale in or into the United Kingdom, the EEA, United States, Canada, Australia or Japan. The securities of 21Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There will not be a public offering of securities in the United States. 

Within the United Kingdom, this document is only being distributed to and is only directed at: (i) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (“FSMA”) (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; or (iii) any other persons to whom this document can be lawfully distributed in circumstances where section 21(1) of the FSMA does not apply.

Within the EEA, this communication is only addressed to and is only directed at qualified investors within the meaning of the Prospectus Regulation (EU) 2017/1129. This document constitutes an advertisement within the meaning of the Swiss Financial Services Act (the “FinSA”) and not a prospectus.21Shares is not an investment advisor and makes no representation regarding the advisability of investing in any such investment product or other investment vehicle. A decision to invest in any such investment product or other investment vehicle should not be made in reliance on any of the statements set forth on this website. Prospective investors are advised to make an investment in any such product or other vehicle only after carefully considering the risks associated with investing in such products, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment product or other investment product or vehicle.

21Shares is not a tax advisor. A tax advisor should be consulted to evaluate the impact and consequences of making any particular investment decision. Inclusion of any assets within an index is not a recommendation by 21Shares to buy, sell, or hold such security, nor is it considered to be investment advice. The website materials have been prepared solely for informational purposes based upon information generally available to the public and from sources believed to be reliable. No content contained in these materials (including index data, ratings, credit-related analyses and data, research, valuations, model, software or other application or output therefrom) or any part thereof (“Content”) may be modified, reverse-engineered, reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of 21Shares.

 The Content shall not be used for any unlawful or unauthorized purposes. 21Shares does not guarantee the accuracy, completeness, timeliness or availability of the Content. 21Shares is not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the content. The content is provided on an “as is” basis. 21Shares disclaims any and all express or implied 
warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use, freedom from bugs, software errors or defects, that the content’s functioning will be uninterrupted or that the content will operate with any software or hardware configuration. In no event shall 21Shares be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

 Investments into crypto currencies and/or digital assets are subject to material and high risk including the risk of total loss. The calculated prices may not be achieved by investors as the calculated price is based on prices from different trading platforms. Furthermore, an investment into crypto currencies and/or digital assets may become illiquid depending on the trading platform or investment product used for the specific investment. Investors should carefully review all risk factors disclosed by the relevant trading platform or in the product documents of relevant investment products.

Optimize Your Exit Strategy: Introducing the Ethereum Withdrawal Simulator for Precise Staking Withdrawal Estimation

Find out about everything going on at 21Shares.

This Week in Crypto
===================

Inflation in the U.S. accelerated 3.7% higher than last year in August, mainly due to a surge in oil prices to a 10-month high. However, the biggest cryptoassets by market cap bounced back over the past week; Bitcoin and Ethereum rose by ​​6.4% and 5.6%, respectively. This surge in returns and total value locked (TVL) is mainly due to the emergence of new Bitcoin spot ETF applications in the U.S., all pending approval. As shown in Figure 1, the biggest winner among settlement layers was Solana, increasing by 10.9% week-over-week. While within the scalability solution, the positive outlier was Arbitrum, increasing by 8.18% over the past week. Aave saw the highest returns across the board, increasing by 16.3% week-over-week.

_Figure 1: Weekly TVL and Price Performance of Major Crypto Categories_
 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/209_Weekly_Price_and_TVL_Performance_8209e73705.jpg)
_Source: Coingecko and DeFi Llama. Close data as of Sep 18, 2023._

5 Things to Remember in Markets this Week:
------------------------------------------

*   ##### The Road to POL  
    Polygon Labs [introduced](https://forum.polygon.technology/t/pip-18-polygon-2-0-phase-0-frontier/12913) its first three improvement proposals in preparation for their migration to an ecosystem with “unlimited scalability and unified liquidity.” In Phase 0, announced on September 14, the company will first initiate the upgrade from MATIC to POL, which will become the native (gas) and staking token for the proof-of-stake version of Polygon. Finally, they’ll launch the Staking Layer, enabling validators to secure many chains in Polygon’s new ecosystem. Although end-users won’t be affected at this stage, Polygon’s move aims to expand Ethereum’s blockspace to be more analogous to a mesh network topology like the internet. With ZK technology, Ethereum blockspace can scale to the size of the Internet for the first time in blockchain history. Once the community endorses these proposals, implementation will begin as early as Q4 of this year.  
      
    
*   ##### Competition Intensifies Between Layer 2 Ecosystems  
    Astar Network – a Polkadot parachain and one of Japan's leading smart contract platforms – announced "[Astar zkEVM](https://astar.network/blog/Supernova-is-Here!-39292)," an upcoming Ethereum L2 built using the Polygon CDP. For context, [Polygon CDP](https://polygon.technology/blog/introducing-polygon-chain-development-kit-launch-zk-l2s-on-demand-to-unlock-unified-liquidity) is an open-source codebase for launching zero-knowledge L2 chains for Ethereum. The modular scaling thesis is playing out before our eyes as L2s converge upon similar blockchain architectures, launching their custom development kits to allow teams to deploy their own chains easily. Arbitrum has "[Orbit](https://arbitrum.foundation/orbit)," zkSync released the "[ZK Stack](https://zksync.io/hyperscalability)," and Optimism has the "[OP Stack](https://stack.optimism.io/)," upon which Coinbase launched its L2 network Base in August. While it's still unclear which standard will accumulate the most network effects, the fierce competition between L2s is unequivocally positive for Ethereum, which may see an influx of new developers, applications, and users. Moreover, L2s must pay transaction fees in ETH when posting transaction data on Ethereum, generating demand for the asset and increasing the network's economic sustainability. 
    

  
_Figure 2: Layer 2 TVL Market Share_
 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/issue209_Figure2_34b72d0941.png)
_Source: [21co on Dune Analytics  ](https://dune.com/queries/2858858/5047644)_

*   ##### Google Cloud Competes with Crypto-Native Oracles  
    In the past few months, we’ve seen a rise in Web2 companies leveraging their time-tested technologies to help strengthen the infrastructure of decentralized protocols. The newest addition to this trend is Google Cloud becoming the [default oracle](https://layerzero.gitbook.io/docs/ecosystem/oracle/) configuration on LayerZero (valued at $3B), a messaging protocol between blockchains offering on-chain assurances facilitated by off-chain entities, which include oracles and relayers. LayerZero had initially integrated with [Chainlink](https://medium.com/layerzero-official/layerzero-integrates-chainlink-oracles-expanding-decentralization-of-the-omnichain-communication-2d9963678483) and TSS; while the 34-so-far dApps using LayerZero will still have the option to use these oracles, Google Cloud poses a threat to its decentralized counterparts. So far, Google Cloud provides oracles for BNB Chain and Tezos, among others. Crypto-native oracles will have to improve their user interfaces, and pricing schemes, along with their due diligence on the real-world data they bring on-chain to address the competition.  
      
    
*   ##### MetaMask’s Snaps  
    MetaMask launched its [Snaps Open Beta](https://metamask.io/snaps/?utm_source=metamask&utm_medium=blog&utm_campaign=snaps_open_beta_content), allowing users to customize their wallet by adding community-built features, similar to how users can customize their smartphone experience by installing various applications from the app store. Built by independent developers, Snaps represents the first step toward MetaMask's "[permissionless innovation](https://metamask.io/news/latest/permissionless-innovation-and-you/)" strategy, enabling anyone to extend the wallet's functionality. This move validates our thesis that wallets are to crypto what browsers were for the Internet – how users will interact with applications and immerse in digital experiences. An interesting use case of Snaps is turning MetaMask into a [cross-chain wallet](https://twitter.com/pluto9r/status/1701712035413692599?s=46&t=sKtZwVClvtWtDe4mWV1Suw) by integrating with ShapeShift and THORChain on the backend. However, users should be wary of what they install on their wallets. Because anyone can contribute, some Snaps may contain bugs or malicious software, potentially compromising user funds.  
      
    
*   ##### The LSM Launches on the Cosmos Hub
    

    The [Liquid Staking Module (LSM)](https://forum.cosmos.network/t/signaling-proposal-draft-add-liquid-staking-module-to-the-cosmos-hub/10368) launched on the Cosmos Hub last week, initiating a safe way to increase capital efficiency on the network. The LSM is a regulation framework for liquid staking providers that aims to mitigate risks by limiting the total supply of ATOM that can be liquid staked to 25%. Lowering the cap to 25% prevents providers from controlling >33% of the stake, a crucial threshold for malicious actors to halt block production or censor transactions. The LSM also enables users to instantly liquid-stake their staked ATOM without having to wait for the 21-day unbonding period. The LSM is a novel approach to the liquid staking protocol design space. On Ethereum, Lido has a [~32% market share](https://dune.com/21co/ethereum-staking-and-withdrawals) of all staked ETH, and many prominent network contributors like [Vitalik Buterin](https://x.com/VitalikButerin/status/1525301234516652032?s=20) or [Danny Ryan](https://x.com/dannyryan/status/1524083774497394691?s=20) have voiced their concerns, calling for a self-limit on Lido's growth.

  

    However, it’s crucial to remember that Lido’s pool is composed by  ~[30 node operators](https://www.rated.network/o/Lido?network=mainnet&timeWindow=1d&viewBy=operator&page=1), with not a single node operator holding more than 1.18% of the stake. Moreover, Lido keeps adding new node operator to increase geographic and jurisdictional resiliency — for instance, last month, the Lido DAO voted to [onboard](https://vote.lido.fi/vote/162) two new node operators – African-based Launchnodes and Latin American-based SenseiNode. Regarding governance concerns that critics may have,  Lido is pushing a [dual governance](https://hackmd.io/@sacha/on-the-risks-of-lsd) model that provides a practical way for Ethereum stakers to have a say in Lido protocol changes. Dual governance essentially allows stETH holders to veto any undesirable changes to the Lido protocol, thereby mitigating the risk of a Lido governance attack on the Ethereum network. Ideologically, setting a cap on liquid staking providers makes sense to increase censorship resistance and promote decentralization. However, there is no guarantee that imposing artificial limits will end well in practice. If it were not for Lido, most staked ETH would have concentrated in a handful of centralized exchanges. 

  

_Figure 3: Market Dominance - Staking Entities_
 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/issue209_Figure3_ba6e94f6fb.png)
_Source: [21co on Dune Analytics](https://dune.com/21co/ethereum-staking-and-withdrawals)_

What You Should Pay Attention To
--------------------------------

##### Ethereum’s Goerli Testnet to Be Replaced with Holesky

Holesky is the first testnet to be tailored for Ethereum’s proof-of-stake consensus. The upcoming testnet promises to have [1.46 million validators](https://twitter.com/parithosh_j/status/1694041437300535399), almost twice as much as the mainnet’s, so that testing the limits of the Beacon Chain (for ETH stakers) is done safely. Moreover, Holesky aims to address other scalability issues in its predecessor, Goerli. The shortage of goETH testnet tokens was a nuisance for developers using Goerli. Ethereum’s core developers will ensure the supply of testnet ETH is abundant, allocating 10x the mainnet’s supply at launch, [1.6B HETH](https://twitter.com/TimBeiko/status/1692286962877776098) for developers.

  

The testnet was scheduled to launch on Friday to commemorate the Merge’s first anniversary. Due to a [misconfiguration](https://twitter.com/parithosh_j/status/1702816780542984504?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1702816780542984504%7Ctwgr%5E479acfe075eab96e10640ecd597a4637ba3585b1%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.coindesk.com%2Ftech%2F2023%2F09%2F17%2Fethereums-holesky-testnet-fails-to-launch-in-rare-tech-misstep-for-the-blockchain%2F) in one of the genesis files of the network, Holesky failed to launch, marking a disappointing milestone for Ethereum. The core developers will regroup to find a fix and launch the new testnet in a week or two.

  

##### New York Regulator Proposes Higher Standards for Coin-Listings and Delistings

On Monday, the New York State Department of Financial Services (DFS) published [guidance](https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230918_gen_framework_greenlisted_coins) to the crypto industry, exempting all virtual currency business entities (licensed under 23 NYCRR Part 200 or chartered as limited purpose trust companies under the New York Banking Law) from prior approval to list coins included on the Greenlist. However, they must notify the DFS 10 days before listing Greenlisted cryptoassets and have a DFS-approved coin-delisting policy.

[The Greenlist](https://www.dfs.ny.gov/virtual_currency_businesses#greenlisted-coins) currently covers Bitcoin, Ethereum, and six more cryptoassets pegged to real-world assets like the USD, JPY, and gold – excluding the two most dominant stablecoins by circulation and market cap, USDT and USDC. Governed by the DFS, the regulator can consider adding cryptoassets given that:

*   The coin or coin issuer has a demonstrated, historic record consistent with safety and soundness and the protection of customers, including broad marketplace adoption, or 
    
*   The coin is a stablecoin approved by DFS for issuance in New York by a VC Entity 
    
The proposal, published on September 18, is open for public comment until October 20. The figure below shows our Dune Dashboards tracking the [liquidity benchmark on Curve’s 3Pool](https://dune.com/21co/stablecoin-dex-liquidity-and-demand). If the percentage exceeds the benchmark, it shows more selling pressure and vice versa. Unalarming short-selling levels of USDC can be seen as the percentage rose above the 33.3% benchmark to 39.5% on September 19. On that note, we will closely monitor what the future holds for stablecoins in the U.S.

_Figure 4: Comparison between USDT and USDC Liquidity Pool_ 
 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/issue209_USD_Tv_USD_Con_Curve_06_5e6d072863.jpeg)
_Source: 21co on Dune Analytics_

Bookmarks:
----------

*   **We’ve published a dashboard tracking the holdings of cybercrime North Korean unit Lazarus Group.** Read [here](https://21.co/research/on-chain-insights-10-crypto-holdings-of-lazarus-group).
    
*   **We’ve cut out our webinars in YouTube shorts for better accessibility.** Watch [here](https://www.youtube.com/@21shares/shorts).
    
*   **Check out the last episode of our Inside Crypto, where Gurjeet Kundi, the Managing Director and Head of Trading at 21co, walks us through the core infrastructure behind 21co’s brand-new wrapped tokens.** Watch [here](https://www.youtube.com/watch?v=iuVz_AqNp7M).
    

Next Week’s Calendar
--------------------

These are the top 3 events we're monitoring for next week.

*   **FOMC Statement:** the Federal Reserve will announce to investors their vote-based decision on the state of this month’s interest rate.
    
*   **Germany’s Information and Forschung:** measures the level of a composite index based on 9K surveyed manufacturers, builders, wholesalers, services, and retailers. Thus, it’s a leading indicator of Germany’s economic health and the wider Eurozone. For the past four months, the index has been deteriorating. 
    

* **Blockchain for Europe** is one of Europe’s leading industry-wide summits discussing primarily crypto policy in Brussels.
 ![](https://5250-prd-web-21shares-cms.s3.amazonaws.com/209_Calendar_f7c8fb9ae3.jpg)
_Source: 21Shares, ForexFactory, Coinmarketcal_


As Competition Rallies Up, What is the Future of Crypto Infrastructure?

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As Competition Rallies Up, What is the Future of Crypto Infrastructure

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