👀 All eyes on ETH

GM everyone. This is 2036, the newsletter that pays you.

If you hold any ETH, you should probably read this newsletter (just saying).

Our lanky King Vitalik is updating Ethereum. So pay attention now.

Last year, Ethereum underwent "The Merge" - the most technically significant crypto event of the year.

The Merge upgraded ETH from proof-of-work to proof-of-stake and made it 99.5% more energy friendly. Just like that.

Ka-ching!

To secure the Ethereum network, ETH holders were incentivized to stake their coins i.e. to lock them up and earn a reward in exchange (around 4%).

Today, $28 billion worth of Ethereum is locked up in staking. Some of it has been locked up for three years.

The Shanghai upgrade will allow people to start withdrawing that staked ETH.

What can you expect will happen when people who've had their ETH locked up for years finally get access to it again?

But hold on, not so fast.

If you're feeling a pinch of panic, here's where things actually get good:

1. The ETH won't be withdrawable (is that a word?) all at once. There will be queues. It'll take months for all the ETH to be withdrawn.

2. When large institutions can stake and easily un-stake, it massively decreases risk for them. This is likely to increase demand for ETH.

3. Most people who bought and staked ETH did so when ETH was trading much higher than it is today. It's possible they won't sell until the price rises above their buying price again.

See all the red? That's the amount of ETH that's underwater - trading at less than the price at which it was staked.

Ok, so what's actually going to happen?

Truth is - no one knows. 

A lot of people expect the number of staked ETH to go up substantially over time.

Right now, only 16% of outstanding ETH is staked, compared to:

• Binance - 97%

• Solana - 70%

• Avalanche - 64%

Yet some still expect a dip right after the upgrade - and predictions go from aggressive selling pressure to mild. Who knows.

If ETH is a long-term play for you, you've got nothing to worry about anyway. All you've got to do is HODL like a Jedi ⚔️

What does help, however, is to understand some of the facts better.

✅ Task: earn $15 in BTC for a summary of the Shanghai Upgrade

The Shanghai upgrade will be one of the most significant events for ETH this year.

There's no date set yet - but it's expected to happen somewhere in March or April.

It will open the doors for institutions to get a 4-5% return on their ETH without lock-up, but will also allow current stakers to sell.

One of the most important things to win no matter what happens is to successfully navigate your own emotions of fear and greed so you can stick to your long-term plan.

And as our friend Naval Ravikant says - the path to peace is truth. The easiest way to overcome your emotions is simply to understand things better. That's why we encourage you to learn here at 2036 - it builds conviction and understanding.

Last week, we came across 2 great Twitter threads on the Shanghai upgrade that are worth reading and summarizing. And that is your task for today.

Step #1: Read the following 2 Twitter threads:

Step #2: Reply to this email with a summary of the threads in your own words. Include your BTC wallet so we can pay you.

We'll pick 2 submissions at random and give them $15 each.

And that's it for today, ladies and gents.

As we get closer to the date, we'll update you with everything you need to know about the upgrade.

Tomorrow we'll be talking more about specific techniques for HODLing like a champ.

Until then - have a great start to the week.

Alex.