The Shanghai Upgrade is the first major network update after The Merge – the recent complete transition of the Ethereum network to the Proof-of-Stake consensus mechanism. The Merge has increased the centralization of Ethereum; however, the Shanghai Upgrade could fix this. The goal of the update is also to give users the opportunity to withdraw staked ETH. At the moment, there is no such option due to the technical limitations of the Ethereum network.
At a recent meeting of Ethereum developers “All Core Developers Execution Call #152” led by Tim Beiko, the Shanghai Upgrade vector shifted. The developers decided that now additional EIPs will be bowed out. It was also decided to exclude EOF implementation from the Shanghai Upgrade. EOF means Ethereum Virtual Machine (EVM) Object Format – a new smart contract format for EVM. These decisions were made in order to facilitate the withdrawal of staked ETH as soon as possible.
In addition, large-scale tests were announced in which the developers plan to launch public testnets for the Shanghai Upgrade next month. The launch of the Shanghai Upgrade, as mentioned earlier, is scheduled for March this year and the most important thing that the developers discussed was the ability to withdraw staked ETH. This is already being tested on a developer–focused test network.
The Shanghai Upgrade is mainly aimed at giving users the opportunity to withdraw their staked ETH as soon as possible. The total amount of staked ETH now exceeds more than 16 million, which at the time of writing is more than $24 billion.
We are waiting for the Shanghai Upgrade and hope that it will not be perpetually delayed like The Merge. It will be interesting to see how validators use this opportunity to withdraw their staked ETH, and how it will affect the Ethereum network. We continue to observe.