Ethereum successfully completed its Shanghai upgrade at 10:27 p.m. UTC on April 12, according to various upgrade status pages.
Validators can now withdraw staked ETH
The Ethereum Shanghai update introduces an important new feature that allows validators who previously staked ETH on-chain to withdraw those tokens for the first time.
However, the upgrade will not flood the market with ETH. Ethereum will only allow 1,350 full validators to withdraw their stake each day for the next 18 months. Because each validator stakes 32 ETH, no more than 43,200 ETH ($83 million at current prices) can enter the market per day, and it is unlikely that all validators will withdraw their ETH.
According to Nansen data, 170,689 ETH are waiting for full output and 4,799 validators are waiting for full output, which represents less than 1% of the participants and ETH staked.
However, more pessimistic estimates suggest that up to 1.54 million ETH could be withdrawn soon after the update due to different partial withdrawal rules. Other estimates suggest that the upgrade has generated $5 billion in unrealized losses.
Meanwhile, third-party betting platforms operate on their own schedule. Lido, for example, suggested that users will be able to start withdrawing money around May.
Shanghai also includes other improvements, such as capabilities for conditional or cancelable payments, features that will reduce contract size and certain contract risks, and enhancements that will lower gas rates for developers.
Shanghai is just one step on the ETH roadmap
Shanghai represents the most significant Ethereum development in months, and the event has been widely watched. ConsenSys has launched a series of commemorative NFTs, while its MetaMask wallet project has provided a user guide and warned of scams.
Despite the anticipation, prices fluctuated slightly around the time of the event. ETH saw slight gains as its price rose 0.2% in one hour and 1.3% in 24 hours. Bitcoin, by contrast, was up 0.0% and down 0.9% over the same time period.
Previously, Ethereum underwent another major upgrade called the Merge. That upgrade took place in September 2022 and saw Ethereum move completely from proof of work (aka mining) to proof of stake.
And while the merger represented a complete change in staking, validators were able to deposit their stake as early as November 2020.
The next big Ethereum is titled Cancun. It will feature proto-danksharding, a feature that aims to improve scalability by improving fees and transaction times.
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