Get To Know Shanghai Upgrade: Historic Improvement In The Ethereum Network (ETH)

Understanding the Shanghai Ethereum Upgrade. (Photo; Doc. Unsplash)

JAKARTA The Shanghai Ethereum upgrade is an important step in the development of the Ethereum blockchain. This upgrade will bring some significant changes to the Ethereum network, which will have an impact on its developers and users.

One of the main features brought up by the Shanghai Ethereum upgrade is the ability of the validators to pull the ETH they lock in the staking process. The Shanghai upgrade is scheduled to allow for a staked ETH withdrawal and permanently move Ethereum into a proof-of-stake mechanism.

However, not everyone understands what this (upgrade) really means. Let's see the Shanghai Upgrade and its implications for Ethereum and its users.

What Is Ethereum Shanghai Upgrade?

The Shanghai upgrade on Ethereum is a hard fork from the Ethereum blockchain which will take place on April 12 at 11:27 PM UTC. Shanghai's upgrade will come along with Capella's upgrade. These two upgrades, known as Ethereum Improvement Proposals (EIP), are called Shapella.

"This is happening Shapella is scheduled for the 194048 epoch, scheduled for 22:27:35 UTC on April 12, 2023 The release of clients compatible with the upgrade is listed in the announcement below," wrote Ethereum developer timbeiko.eth (@TimBeiko) 28 March 2023.

Launching DailyCoin, the Shapella upgrade is well-known mainly for allowing a staked ETH withdrawal. Previously, Ethereum users had to deposit and lock up 32 ETHs to become validators and help secure the Ethereum network.

With the Shanghai hard fork, also known as the EIP-4895, the validators were finally able to withdraw the ETH at stake for the first time since 2020. Currently, there are more than 18.1 million ETH locked in the Chainbank deposit contract.

Does this mean all 18.1 million ETHs will be available for immediate withdrawal? No, the validators will only be able to withdraw 43,000 ETHs per day, potentially limiting its impact on falling ETH prices.

Another Upgrade In Shapella

While the EIP-4895 is the best known upgrade in Shapella, there is another minor upgrade to be brought by this hard fork.

One of them is the EIP-3651, which aims to reduce transaction fees or gas fees related to the payment of Maximum Extraxable Values (Maximal Extractable Value/MEV) when accessing the COINBASE address (COINBASE here not referring to crypto exchanges but to a software that allows developers to receive new tokens).

Another upgrade is EIP-3855. This upgrade introduces a new PUSH0 instruction, which reduces gas costs for developers. EIP-3860 limits the cost of witness accounts for developers in certain cases and a number of other improvements.