You can now unstake your staked Ethereum (ETH). This update was announced by the Ethereum Foundation.
The Merge and the Shapella upgrades
In September 2022, the Ethereum network officially transitioned from proof-of-work (PoW) to proof-of-stake (PoS), making the network more energy efficient and scalable. We know this transition as The Merge.
Following the Merge’s success, Ethereum developers have been working on two upgrades required to support unstaking These upgrades are called Shanghai and Capella, or together the Shapella upgrades.
The completion of the Shapella upgrades allows people to unstake their initial staked principal (the quantity initially staked) and unlock their rewards (the quantity earned from staking the principal).
Understand your options after the Shapella Upgrade
If you would like to continue staking your ETH, then we require no action on your end. Your staked assets will continue earning rewards and remain secure following the upgrade.
If you would like to unstake your ETH, please ensure your app is updated (version 2.84.0 or above) and start by reading the considerations below:
Make sure to read the following considerations before unstaking your Ethereum.
You cannot cancel unstaking requests.
Once you submit an unstaking request, it won’t be possible to cancel the request. During the unstaking process, you won’t be able to trade, transfer or stake any ETH included in the request.
Rewards during the unstaking process.
After submitting an unstaking request, Wealthsimple cannot guarantee ETH will keep earning new rewards during the unstaking period due to operational factors.
Unstaking will take 10 days.
Unstaking requests are processed on-chain on the Ethereum network, the current timeline is 10 days which also includes any time needed for Wealthsimple to complete the unstaking process. The timeline is variable, depending on how many others are unstaking on the network.
Existing ETH staking rewards will automatically go through an unlocking process following the Shapella upgrade.
This means that rewards earned before the Shapella upgrade don’t require an unstaking request and will be automatically available to clients after May 1.
Future ETH staking rewards aren’t locked.
This means that rewards earned after May 1st don’t require an unstaking request and will be automatically available at the normal cadence of 7 days.
Rewards will be paused between April 12 and May 1, and this only applies following the Shapella upgrade
This is to ensure that the sweeping mechanism described by the Ethereum Foundation is completed across all validators staked on the network. This also ensures that rewards are distributed successfully to clients. During this period, normal reward distribution will be paused and there will be no rewards for this period. After May 1, the reward payout timeline will return to the normal cadence of 7 days.
Unlocked rewards will be added to your ‘available’ ETH balance.
This means that unlocked rewards can be traded, transferred or staked.
After reading the considerations, you can unstake your ETH by following these steps:
- Log in to the Wealthsimple mobile app
- Tap the Home tab at the bottom of your screen
- Select your Crypto account
- Under Staking Rewards, choose the ETH rewards section
- Review the ETH Network Upgrade notice and tap Got it
- Select Unstake at the bottom
- Read through the ETH Unstaking information provided and tap Confirm
- Choose the amount of ETH you would like to unstake and tap Confirm. You can only unstake assets that are already staked.
- We will send an email and app notification when the unstaking process is completed
Frequently asked questions on how ETH unstaking works on a protocol level
What are the Shanghai and Capella upgrades?
To set the context, the Pre-Merge Proof-of-Work Ethereum network was previously made of only 1 layer. After the Merge, it’s now composed of 2 layers: the Execution Layer (EL) and the Consensus Layer (CL).
- Execution Layer: Where smart contracts live and also where everyday users interact with decentralized applications (dApps) and perform everyday transactions.
- Consensus Layer: Where the network is secured and where validators(stakers) are operating on. Remember that a validator is a network participant running a software with a locked stake that acts as collateral and adds blocks to a PoS Blockchain.
Both of these 2 upgrades are necessary to make unstaking possible on Ethereum. The Shanghai upgrade is specific to the Execution Layer (EL) while the Capella upgrade is specific to the Consensus Layer (CL).
What types of unstaking are supported?
Unstaking can be done either in full or partially *(see below for special context).
*How does partial unstaking work?
Partial unstaking occurs automatically when a validator’s balance exceeds 32 ETH. The excess amounts are consensus layer rewards (CL). Any excess amounts will not earn additional rewards (does not compound) and aren’t staked.
The excess ETH is automatically sent to a validator’s address. In terms of an analogy, the water overflowing from a full glass would be the excess ETH rewards and the existing water in the full glass would be the 32 staked ETH. Aside from ETH rewards being available automatically, partial withdrawal amounts cannot be specified on a validator level.
How does full unstaking work?
Full unstaking involves a validator exiting the active validator set and having its unstaked ETH sent by the network to a specified address. Once out of the active validator set, the initial stake plus the accrued rewards are sent to the validator’s address. This is why partial unstaking isn’t possible due to the validator having to exit the active set.
How does unstaking ETH actually work?
The network will check one of the following two criterias:
- Validator who has the exit active validator set
- Validator balance is over 32 ETH
The validator withdrawal is processed and added to the current network block. Next, the ETH is sent to the validator’s withdrawal address.
What is the active set vs exit active set?
As long as a validator remains in the active set and doesn’t request an exit, the validator will continue accruing rewards. Only excess amounts over 32 ETH will be automatically available and sent to the specified address.
Exiting the active set requires a validator to submit this request. This request cannot be undone. Once out of the active set, unstaking of the original stake plus rewards is automatically processed and sent to the withdrawal address. Validators out of the active set don’t earn rewards.
How long does it take to exit a validator set?
Exiting the validator set is a prerequisite for full unstaking and validators must submit an exit request to the network. The timing to process the exit request depends on whether there are other validators waiting to exit.
If there are no other validators, then it would take around 4 epochs to exit if there are no other validators.1 epoch = 32 blocks. 4 epochs = ~25 min
If there are other validators waiting to exit, then the validator joins the exit queue. Currently, only a max of 7 validators can exit per epoch (1575 validators/day). Once exited, there’s an additional 256 epoch (~27 hrs) cooldown/lock up period before the validator can be unstaked. If there are 100 000 validators requesting exit, it could take ~63 days for all 100 000 validators in the queue to exit.
How long does it take to process unstaking requests?
A validator must first have exited the active set before it can unstake. At this state, 16 requests can be included per block and the average block time is 12.1 seconds. The core Ethereum community set the 16 requests limit per block. The Ethereum Foundation provided the following estimates based on the number of requests.
Number of unstaking requests
Time to complete
From the start of the active set exit to the unstaking request processing, it would take a minimum of 1 day to complete the entire process assuming there is no queue exiting the active set and the unstaked ETH is picked up immediately by the network to send to the address. The timing for unstaking requests to be picked by the network is random and the size of the exit queue and the number of unstaking requests will impact the overall processing timing. This is why the unstaking process timeline can vary between weeks to months depending on factors described earlier.