Ethereum has been the most hyped crypto of the past year of 2022 – especially due to the highly anticipated Ethereum Merge that successfully went live on the 15th of September 2022. This Ethereum Merge, practically ‘merged’ the proof-of-stake based Beacon Chain to the Ethereum mainnet to transition the largest altcoin by market capitalization from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one. This had scripted crypto history by being one of the biggest changes to take place on any blockchain network at once.
Read all about it: Ethereum Merge Transition to Proof-of-Stake
Ethereum had seen one of the biggest rallies in the 2022 bear market, ahead of this highly anticipated transition from PoW to PoS – nearly doubling in value from around $1000 in the end of July to the middle of August 2022. But with all that well in the past now – what does the new year of 2023 have in store for Ethereum?
Staked ETH withdrawal on the way?
While this is still a dicey play, from the statements that have been coming out from the developers in the Ethereum Foundation and the whole team is that it could be on the way. Essentially, before the actual Merge took place, ETH miners, who wanted to be a part of the new Ethereum ecosystem which was based on the PoS consensus mechanism that ran on the system of staking – and wanted to become validators in that – they had to stake a certain amount of ETH to a smart contract. This was basically to ensure that there was a support in the community for the merge that was about to take place.
Also, in that process by putting up a filter of staking a minimum of 32 ETH to become a validator removed a lot of the smaller, more risky players from becoming validators and potentially confirming malicious transactions on the chain. Larger players could be considered to be more invested, had more skin in the game and thus potentially less susceptible to fraudulent activities.
However, in a news report where Marius Van Der Wijden, a Software Developer at the Ethereum Foundation who spoke to CoinDesk reporters said,
“Withdrawals are as good as done. All that is left to do is to test the code that enables withdrawals, which should be mostly done by February/March.”
Ethereum Shanghai Upgrade
While the point above could be a part of this, the Shanghai upgrade in and of itself is a whole development in the Ethereum ecosystem that you might want to look into. The Shanghai upgrade is going to bring about a series of critical updates and elemental changes to Ethereum in the blockchain network’s EVM functionalities.
Prior to the actual release, the Ethereum Foundation released a testnet late last year on 14 October, 2022 – called ‘Shandong’. This testnet will be used to test and finalise the Ethereum Improvement Proposals (EIPs) that are expected to be rolled out in the actual Shanghai Update.
Simply put, the Ethereum Shanghai Upgrade is slated to bring major developments in three broad categories:
- Reduce gas fees
- Withdrawal of staked ETH tokens
- Updates to smart contract facilities
Proto-danksharding on the cards too
Before we get into that, let’s first understand what sharding means. Sharding as a concept has been in the talks for quite some time now. Sharding is a method to essentially improve the efficiency of a blockchain network by splitting up the network across multiple chains or ‘shards’ to make it network more scalable. It’s akin to adding newer lanes onto an existing highway, thus enabling greater traffic to move down the highway more efficiently and quickly.
According to a report by CoinDesk, Parithosh Jayanthi, a DevOps Engineer at the Ethereum Foundation, said that he thinks that [proto-]danksharding will be “the most exciting thing devs will work on in 2023,” further adding that,
“It has the potential to onboard millions of users and truly provide scalability to Ethereum.”
Read more: Ethereum Price Prediction
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