Ethereum, the second-largest cryptocurrency by market cap, has an ace up its sleeve in the form of an upcoming upgrade. The much-hyped Shanghai upgrade is expected to boost interest in Ethereum with some significant improvements to the network. But Ethereum devs recently announced that the upgrade, which was initially scheduled to go live in March, will now be launched only in April.
Why has this news created waves in the crypto community? What changes with this upgrade? Let’s find out!
What Is the Shanghai Upgrade?
Ethereum launched its Beacon Chain in 2020. And since its release, users have staked over $27 billion worth of ETH on the network. None of this is currently withdrawable. With the highly anticipated Shanghai upgrade, validators will be able to withdraw staked ETH from the network, which is why this upgrade is such a big deal.
Initial Plans for the Shanghai Upgrade
The upgrade was originally slated for a release in the second half of 2023, with September being set as the latest possible date for launch. But in December 2022, following a meeting, Ethereum devs gave a tentative March date for the upgrade to go live, a significant move up from September. They then confirmed this in January, with developers seeming confident about the early release date.
Owing to the early release, the upgrade was also set to sacrifice quite a few other improvements to the overall Ethereum network. Some developers did express concern about the early release, stating that it might be too ambitious and not very realistic.
Launch Delayed to April
Last week, Ethereum developers announced that the Shanghai upgrade’s release date would likely be within the first two weeks of April. In its place, the Goerli testnet will go live in March. The Goerli testnet is essentially a dress rehearsal of the Shanghai upgrade, allowing developers to iron out the kinks before launching the upgrade on the mainnet.
This is not the first testnet for the Shanghai upgrade. The Zhejiang and Sepolia testnets have gone live already. With multiple iterations and fixes, the devs aim to ensure that the upgrade runs without a hitch once it’s finally on the mainnet.
The Ethereum Staking Pool
Users have currently staked over 17.5 million ETH tokens on the Ethereum blockchain. That accounts for over 14.5% of all ETH in circulation.
Currently, the largest stakers on the network are intermediaries like Lido and crypto exchanges such as Coinbase, Kraken, and Binance. These four companies pool together customer deposits to stake ETH and earn passive rewards, and their deposits alone make up 56% of all staked ETH on the network.
The Ethereum devs are clearly prioritizing quality over speed. And given the recent mishaps in the crypto space, that isn’t really the worst thing to do. Building trust is the most important thing for crypto and blockchain right now, and Ethereum seems to be on track to do just that. While the upgrade is delayed by a month, it only makes sense to release the best possible version of it.