The Ethereum blockchain is set to undergo another major upgrade when the Shanghai testnet occurs next month.And with anticipation already building, its developers have announced a successful rehearsal for the event.
All Set for Shanghai An Ethereum insider announced on Tuesday that the blockchain’s Sepolia testnet had successfully undergone an upgrade that essentially simulates the upcoming Shanghai hard fork.The “ Shapella” upgrade , which essentially combines the Capell and Shanghai hard forks, was successfully implemented in the early hours of February 28.Shanghai is the fork’s name on the execution layer client side, while the upgrade’s name on the consensus layer client side is Capella.
Sepolia testnet has successfully upgraded to Shapella! 🌃
Some of the Prsym validators are offline due to the old geth version.They will come online in the next 10 mins!
Next stop: Goerli pic.twitter.com/pb43Gq7w9C
— terence.eth (@terencechain) February 28, 2023
The success of the Shapella upgrade shows that the Ethereum Shanghai upgrade itself is on track for a successful implementation.
Some critical Ethereum Improvement Proposal (EIP) changes on the execution layer will include the warm coinbase – not the same as the crypto exchange – and Beacon Chain push withdrawals, which will allow validators to withdraw staked Ether (ETH) from the Beacon Chain to the Ethereum Virtual Machine via a new system-level operation type.
On the flip side, warm coinbase has been tipped to improve Etereum’s functionality by slashing network fees for builders and decentralized application (dApp) developers.Currently, coinbase is the name of the software that builders would need to get new tokens on the Ethereum network.
Every new platform transaction will have to interact with the coinbase software several times, although first interactions tend to cost more as the software has to “warm up.” Following this, fees for subsequent transactions will drop.
With the introduction of EIP-3651, the coinbase software will be warm to begin with, meaning that transaction interactions will incur a much lower gas fee.
The Hard Fork’s Possible Effects For the time being, network validators and participants will have to wait for the Shanghai upgrade, which is scheduled for mid-March.Many who have staked their ETH on the Beacon Chain since December 2020 will be able to withdraw it, making way for more flexibility in staking and unstaking.
The anticipation is already mounting, with liquid staking protocol Lido Finance announcing last week that it had just secured its largest single-day staging haul with 150,000 ETH.
The platform, which allows anyone to stake without meeting the Beacon Chain’s 32 ETH minimum requirement or locking their tokens for an extended period, explained that it needed to activate a “daily staking limit” feature to protect users and validators on its network.
Lido protocol has registered its largest daily stake inflow so far with over 150,000 ETH staked.🎉
Upon reaching this number, a curious (but important) protocol safety feature called Staking Rate Limit was activated.
Here’s how it works🧵👇 pic.twitter.com/ngBtWz7q18
— Lido (@LidoFinance) February 25, 2023
The feature would limit the amount of staked Ether (stETH) that could be minted in 24 hours, affecting essentially only users who might try to mint stETH in the meantime.
Nevertheless, it is also worth examining the effects of the Shanghai upgrade on the price of ETH itself.
The asset, which is one of the largest in the market by market cap, has seen its price waver amid the market’s uncertainty.When the Shanghai upgrade comes through, there is a chance that network validators will withdraw their funds en masse.
If this happens and they don’t make corresponding deposits or ETH purchases, the ETH price is likely to fall even lower than it already has.
Market dynamics could work in ETH’s favor and boost its price, but the Ethereum Merge from last September demonstrated that events expected to lead to a price surge do not always do so..
