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Ethereum Completes Shanghai Upgrade

 

According to several update status pages, Ethereum successfully completed its Shanghai upgrade at 10:27 p.m. UTC on April 12.

The Shanghai upgrade to Ethereum adds a significant new feature that lets validators who previously staked ETH on-chain to withdraw those tokens for the first time.

The upgrade, however, will not flood the market with ETH. Over the next 18 months, Ethereum will only allow 1,350 complete validators to withdraw their stake per day. Because each validator stakes 32 ETH, the market can only accept 43,200 ETH ($83 million at current rates) per day – and it is doubtful that all validators will withdraw their ETH.

According to Nansen data, 170,689 ETH and 4,799 validators are awaiting full exit, accounting for around 1% of stakers and staked ETH.

However, more pessimistic projections predict that due to differing partial withdrawal regulations, up to 1.54 million ETH could be withdrawn quickly after the upgrade. According to other estimates, the upgrading resulted in $5 billion in unrealized losses.

Meanwhile, third-party staking platforms operate on their own timetable. For example, Lido has stated that users would be allowed to initiate withdrawals in May.

Other enhancements include a basis for conditional or cancellable payments, features that minimize contract size and certain contract hazards, and enhancements that cut gas prices for developers.

Shanghai is the most major Ethereum development in months, and the event has received widespread attention. ConsenSys has issued a series of commemorative NFTs, and its wallet project MetaMask has issued a user guide and issued a warning against frauds.

Despite the hype, prices varied just minimally around the event’s time. ETH experienced minor gains, rising 0.2% in one hour and 1.3% in 24 hours. Bitcoin, on the other hand, was up 0.0% and down 0.9% within the same time period.

Previously, Ethereum experienced a significant upgrade known as the Merge. In September 2022, Ethereum completed the shift from proof-of-work (commonly known as mining) to proof-of-stake.

Moreover, despite the fact that the Merge signified a major change in staking, validators might deposit their stake as early as November 2020. Cancun is the name of the next major Ethereum. It will include proto-danksharding, which attempts to improve scalability by lowering costs and shortening transaction times.

 

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