Ethereum’s Shanghai Upgrade Launched
The highly anticipated Ethereum Shanghai update has gone live, marking the final step in the network’s move from proof-of-work to proof-of-stake consensus mechanism. The update is expected to improve the Ethereum network’s energy efficiency while providing better technology improvements.
JUST IN: Ethereum Shanghai upgrade officially goes live, enabling over $34.5 billion in staked $ETH to be withdrawn.
— Watcher.Guru (@WatcherGuru) April 12, 2023
New Withdrawal Functionality
The Ethereum Shanghai update enables the withdrawal of previously staked Ethereum on the network for the first time. This withdrawal functionality is the primary function of the two-part network update, including the Beacon Chain update known as Capella. The update enables previously staked ETH to be deposited into execution layer accounts, thereby closing the loop on staking liquidity.
This withdrawal approach eliminates the need to submit transactions that request a specific amount of ETH to be withdrawn, as there is no transaction fee required. A maximum of 16 withdrawals can be processed in a single block, and 115,200 validator withdrawals are able to be processed on a given day.
Ethereum’s Withdrawal Feature
Ethereum predicts that the calculation will equate to 400,000 taking 3.5 days to complete, and 800,000 taking 7 days. The withdrawal feature signifies a host of technology improvements for the Ethereum Network, as the PoS model is a more optimal method in regard to energy efficiency. Moreover, it verifies crypto transactions with randomly elected validators based on staked ETH.
Despite the highly anticipated arrival of the upgrade, there has been some speculation that it could have a negative impact on the price in the short term. However, its implementation is a significant step for Ethereum, signalling a move towards a more sustainable and efficient network.
The Ethereum Shanghai update has been welcomed by the crypto community as a step in the right direction for the network’s growth and development. As the network continues to evolve, the new withdrawal feature is expected to provide greater liquidity and flexibility for stakers on the Ethereum network.
