It's happening 🎊
Shapella is scheduled on mainnet for epoch 194048, scheduled for 22:27:35 UTC on Apr. 12, 2023 📆
Client releases compatible with the upgrade are listed in the announcement below 👇https://t.co/I0hSv9lnjz
— timbeiko.eth ☀️ (@TimBeiko) March 28, 2023
In one of the biggest announcements by Ethereum since the Merge itself back in September 2022, Ethereum developers have finally announced the launch of the Shapella Sepolia upgrade. The Shanghai-Capella upgrade, also called Shapella, is an upgrade to the network that is aimed mainly to enable ether (ETH) withdrawals from the deposit contract. Ever since the launch of the PoS-based Beacon Chain back in December 2020, those who wanted to become validators on the new Ethereum 2.0 network had to stake 32 ETH or more to the network which was locked for an indefinite period of time. Now finally the upcoming Shanghai upgrade is going to solve that.
On the Ethereum All Core Developers Execution (ACDE) Call on March 16, it was announced that the Shanghai hard fork on the Ethereum mainnet would take place on April 12, 10:27 pm at epoch 194048. This translates to April 13, at 3:57 am IST.
Late on March 14, UTC, or on March 15, about 4 am, Indian Standard Time, the Shapella hard fork was finally implemented on the third and final Ethereum Goerli testnet after the Sepolia upgrade that went live two weeks ago. All that is left now is the implementation of the Shanghai Capella Upgrade on the Ethereum mainnet, which is slated to occur sometime in April 2023.
The Shanghai Capella Upgrade has been one of the most highly anticipated events since the Ethereum Merge went live back on September 15, last year. This is because Shapella is expected to implement the EIP-4895, which will allow the unstaking of ETH tokens for the first time since December 2020, when the PoS-based Beacon Chain was launched. This would bring the Ethereum network one step closer to a fully functional proof-of-stake (PoS) blockchain network.
Before we get into Ethereum’s Shanghai Upgrade, let’s recap what happened a little over a month ago. On the 15th of September, 2022 – Ethereum – the largest smart contract-capable blockchain network underwent one of the biggest transitions to ever happen in any crypto in history. The Ethereum network underwent something called the Merge which transitioned this behemoth of a network, second largest in the world by market cap – from a proof-of-work to a proof-of-stake consensus mechanism.
This is the first step in a long plan to transition Ethereum into the future, where gas fees are low, transaction speeds are high, at least at par with its competitors and eventually maintain its position as the biggest smart contract-capable blockchain platform out there.
ETHEREUM SHANGHAI UPGRADE (MAINNET) | APRIL 12, 2023 |
SHANGHAI UPGRADE ON GOERLI TESTNET (FINAL TESTNET) | March 14, 2023 |
SHANGHAI UPGRADE ON SEPOLIA TESTNET | FEBRUARY 28, 2023 |
FINAL ETHEREUM MAINNET MERGE | SEPTEMBER 15, 2022 |
BELLATRIX UPDATE | SEPTEMBER 6, 2022 |
SEPOLIA TESTNET UPDATE | AUGUST 22, 2022 |
GOERLI TESTNET MERGE | AUGUST 11, 2022 |
TENTH MAINNET SHADOW FORK | JULY 27, 2022 |
SEPOLIA TESTNET MERGE | JULY 6, 2022 |
MAINNET SHADOW FORKS | APRIL 12, 2022 |
KILN TESTNET MERGE | MARCH 16, 2022 |
ARROW GLACIER | DECEMBER 9, 2021 |
ALTAIR UPGRADE | OCTOBER 21, 2021 |
LONDON HARD FORK | AUGUST 5, 2021 |
Read more on: Ethereum Merge
Very simply, Ethereum Shanghai Upgrade is set to introduce a bunch of critical updates and elemental changes to Ethereum in the blockchain’s EVM functionalities. Prior to the actual release, the Ethereum Foundation released on October 14, 2022 a pre-Shanghai testnet for the same. This testnet, also known as ‘Shandong’ will be used to test and finalize the Ethereum Improvement Proposals (EIPs) that are expected to be rolled out in the actual Shanghai Update.
Well, it is important due to several reasons and I will list them for you below. However, it must be noted that these are calculated assumptions made with the available data. We will keep this section updated as we get more information regarding the upgrade.
Gas fees: One of the biggest things that the Ethereum Shanghai Upgrade is expected to bring about is to reduce gas fees for layer-2 solutions running on top of Ethereum, for example, Polygon, Optimism, and the like. These Layer 2 solutions make using Ethereum faster and cheaper and this upgrade could potentially make it even cheaper to transact on the Ethereum blockchain.
Withdrawal of staked ETH tokens: So ahead of the Ethereum Merge, all those who were interested to become a validator in the new PoS Ethereum Beacon chain, had to stake a certain amount of ETH to a deposit smart contract which was locked in with the contract even after the Merge happened. But now with the Shanghai Upgrade, we may see the lock-in be released and those who had staked their ETH tokens may be able to unstake them.
Updates to smart contract facilities: This is another important update that can be expected out of the Shanghai Upgrade. Ethereum being the single largest smart contract-capable blockchain network has to stay ahead in terms of development.
Here’s a GitHub repository post regarding the same with some additional information too.
Source: Github.com
Read more: Ethereum Virtual Machine Explained
As discussed in the article above, the Ethereum Shanghai Upgrade is the next most awaited development to take place on the Ethereum blockchain network. Now there are a couple of reasons why this is so highly anticipated, especially after the Ethereum Merge that took place last year on September 15, 2022 – however, there is one that is definitely going to take up headlines in the space.
Simply put – the Ethereum Shanghai upgrade, specifically the EIP-4895, will allow ETH stakers to remove their staked funds as validators. This is significant because back in December 2020, when the proof-of-stake Beacon chain was launched – participants on the Ethereum network who wanted to be a part of Ethereum 2.0 as validators had to stake a minimum of 32 ETH tokens which was practically going to be locked up for an indefinite period. Once you had staked the 32 ETH tokens, these validators weren’t allowed to pull their funds out whenever they wanted to.
Now this begs the question – what effect will this move have on you? Well, that actually depends upon the situation you are in, or rather the kind of participant you are on the Ethereum network. If you are simply a validator on the Ethereum PoS chain, you will now be able to pull your staked ETH tokens and sell them off if you wanted to.
Continuing from the above thought – if you are a trader or an investor in the ETH token, the story changes a little bit. While it cannot be said for certain, the implementation of EIP-4895 could have certain ramifications on the price of the token. This is because according to data from Staking Rewards, 14.09% of all eligible ETH tokens have been staked. Thus when staking withdrawals are opened up, this could amount to significant liquidity flooding back into the open market, putting some downward pressure on ETH prices. However, that is assuming that the entirety of the 14.09% of ETH tokens are immediately pulled out and sold off – which in retrospect seems highly unlikely. Thus, for traders and investors, keeping a vigilant eye on the percentage of ETH coins staked would be sound advice.
On the other hand, things could also move in the opposite direction as ETH could become more attractive to users due to its improved liquidity. Those who didn’t want to go via liquid staking protocols would now have a chance to directly stake ETH with Ethereum.
However, one overarching positive thing that can be taken out of this is that while locking up coins is a means to make the process more secure, it could be also looked at as a means of artificial control and thus a removal of that cap could bring about more balance and equilibrium in the market.
While the actual release date for the Ethereum Shanghai Upgrade cannot be discerned with certainty, however, the latest estimates and market speculations suggest that it could be implemented as early as March 2023. However, with the Shapella Sepolia Upgrade confirmed for 28 February 2023, we know for certain that the unstaking feature for locked Ether in the ETH 2.0 deposit contract is going to be rolled out, whenever it might happen!
Additional Read: Ethereum Price Prediction