The price of Ethereal jumped 4.7% overnight, for CoinGecko data, as the second largest cryptocurrency nears its long-awaited Shapella upgrade in April 12th.
Shapella is the umbrella term for two key enhancements coming to the Ethereum network: Carry off and Capella. These refer to unlocking withdrawals for Ethereum staked on the network at the execution layer and consensus layer, respectively.
Notably, Ethereum's price action has also outperformed Bitcoinincrease of 1.3% during the same period.
Next week's update will allow withdrawals of ETH from the staking contract, reducing the risk of holding Ethereum staking (stETH), also known as liquid staking derivatives (LSD) through platforms such as Lido Finance.
As such, governance tokens tied to various liquid staking platforms have also enjoyed a sharp rise in price. These platforms arose to allow Ethereum holders to stake their ETH and get a liquid staking token in return. This token could then be reused throughout the DeFi world for additional returns.
The governance tokens of the main liquid staking platforms in Lido DAO (I DO), rocket pool (RPL), and Frax shares (fxs) enjoyed double-digit percentage gains in the last 24 hours.
In general, these LSD tokens have produced higher percentage gains, at least twice as much as ETH in 2023. Top LSD tokens have posted up to 150% compared to Ethereum's close to 65% gains so far this year.
Currently, decentralized liquid participation platforms represent 33.3% of the total ETH staked. Lido DAO is a clear leader in this space, with a 93.79% participation.
Shapella is the biggest Ethereum upgrade since the network meltdown event last September when the protocol went from a work test (PoW) consensus mechanism to a proof of participation (PoS) mechanism.
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