Shanghai’s Latest Update Bring Relief For Stakeholders

Ethereum’s most awaited Shanghai upgrade would include the ability to withdraw staked ETH, Bloomberg News reported recently.

Stakeholders and other interested parties are relieved by the revelation since it puts an end to lingering concerns about an extended token lock-in.

The amount of Ethereum invested into the staking contract has steadily increased since the Beacon Chain started live in November 2020. Presently, deposits totaling 15.9 million ETH, worth roughly $19.8 billion, or 13.2% of the total supply.

After the Merge in September 2022, the Ethereum network will undergo a significant upgrade with Shanghai. Its main highlights include:

Reducing the gas charge for layers 2 solutions could make using Eth after Shanghai faster and more affordable.

Efficiency improvements in data access and storage, like the elimination of past block hash information from contracts. Removal of the contract lock on staked tokens will enable unstaking and the withdrawal of staked ETH.

The 151st Ethereum Core Developers Meeting took place on December 8, and discussions there revealed that core programmers have set a possible timeframe of March 2023 for the Shanghai hard fork.

Additionally, programmers plan to roll out the Ethereum Improvement Protocol (EIP) 4844 update, which would bring proto-danksharding to the network, in May or June 2023.

Despite the completion of the eagerly awaited proof-of-stake Merge upgrade on September 15, staked Ether (stETH) was locked.

All About Ethereum Hard Fork

Nearly 3.5 million stETH [$4.48 billion] of the token, which was established by the decentralized financial protocol Lido, are currently in use. Users of stETH could only withdraw their money following the Shanghai upgrade, including any applicable staking incentives for confirming network transactions.

According to the Ethereum Foundation, this organizational strategy was used to “simplify and optimize attention on a successful transition to proof-of-stake” throughout the upgrades.

The EIP-4844 upgrade is intended to introduce a new data-blob-transaction prototype that was originally created by developers on February 21, 2022, following the hard fork.

Optimistic Rollups, a layer-2 technology, allowed Ethereum processing and network storage to be moved off-chain, increasing scalability by 10x to 100x.

The capacity of rollups is expected to increase by up to 100x with the introduction of big portable bundles that can hold cheaper data in Eth transactions. While the change will reduce transaction costs for layer-2 solutions, it will have no impact on the cost of Ethereum gas.