Ethereum developers finally deploy the much-awaited Shanghai upgrade

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Key Takeaways:

  • The ability to unstake Ethereum from the Beacon Chain is now just one step away for Ethereum validators.
  • When the epoch was activated, there was a 29% validator involvement rate, which is extremely low for Ethereum.

On March 14 at 10:26 p.m. UTC, epoch 162304 on the Ethereum Goerli testnet initiated the Shanghai update, more precisely referred to as “Shapella”. The upgrade was finished 15 epochs later because of the limited network participation at the time it was initiated. On Goerli, withdrawals of staked $ETH are being handled.

The Shapella upgrade was effectively put into place on the Sepolia testnet by the developers last month in February.

For the first time since Ethereum introduced staking with the beacon chain back in 2020, investors will be able to use their staked ETH during the Shanghai update, which is significant for the Ethereum community.

Financial services and investment firms like JP Morgan have already forecasted that the upgrade may boost profits for struggling cryptocurrency exchanges like Coinbase. Exchanges may distribute staked ETH rewards to their users in order to increase their earnings and pay out a sizable dividend.

The hard fork, nevertheless, had some issues related to its execution. Tim Beiko, an Ethereum core engineer, observed that a number of testnet validators failed to update their client software prior to the Goerli fork, which caused some of the processing of deposits to go more slowly than they should have.

Given that the Goerli testnet is the biggest Ethereum public testnet, the deployment of the Shapella hardfork on it was closely observed. Additionally, this is the final opportunity for staking providers to guarantee that the staked ETH tokens can be unlocked and withdrawn before Shapella is integrated into the Ethereum mainnet.

When the update was initiated, only 29% of validators were participating, according to CoinDesk. The issue could arise for one of two reasons: First, there was less incentive to operate a validator and keep an eye on it because the testnet $ETH was worthless. Second, a sizable number of modifications to withdrawal credentials were processed immediately at the fork.

There were numerous additional changes that needed to be handled because this was the first time users had been able to submit them, which could cause missed blocks and attestations on nodes with limited resources. 

Altogether, the Ethereum Shanghai upgrade is expected to be a driving force behind the growth of cryptocurrencies, boosting trading activity and opening up a wide range of investment possibilities. Exchanges and staking services have already begun to make significant investments in this upgrade, indicating that there may be a number of profitable markets and business opportunities in the future.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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