Ethereum (ETH) is one of the most popular digital currencies in the crypto market, whose blockchain has experienced many changes so far. Each of these updates causes Improve network performance And Increasing popularity they have become Known as the biggest Ethereum 2 update ever, the Shanghai Update has recently created a lot of controversy and if everything goes according to predictions, it will Reducing the cost and increasing the speed of transactions it will result in. In this article, we will thoroughly review the Shanghai fork of Ethereum.
What is Shanghai Ethereum Update?
In September 2022, the Ethereum blockchain finalized its decision to move to a proof-of-stake (PoS) consensus mechanism. Before this date Ethereum To further its goals, it used a Proof-of-Work (PoW) consensus mechanism to process and validate ETH transactions. Now, users who intend to participate in the validation will not need to solve computational puzzles and will instead have to stake up to 32 ETH. Since the Ethereum mainnet was merged with the PoS Beacon chain, users could not delete their stake amount.
The Shanghai Ethereum update fixes this problem and allows users to withdraw. On January 5, 2023, ETH developers agreed to promote Shanghai Ethereum in March 2023. Users will be able to test and run the Ethereum Shanghai fork running on a public testnet at the end of February 2023. The Shanghai Ethereum update focuses on the EIP-4895 improvement proposal. But besides EIP-4895, several other EIPs will also be affected by the Shanghai Ethereum update.
What is the significance of Shanghai Ethereum update?
The Shanghai update is done for various reasons and has many benefits. Predictions indicate that this update will play an important role in the development of ETH and can solve the major problems of the Ethereum network. Therefore, the Shanghai update is important because:
- Reducing gas costs: One of the best and most attractive effects of the Shanghai update is to help reduce gas costs. Reducing these costs is for Ethereum’s second layer solutions. These solutions help to use ETH better, faster and cheaper. So the Shanghai update will reduce the cost of using Ethereum.
- The possibility of canceling and withdrawing staked ethereums: Before this, people who wanted to participate in Ethereum validation had to block a certain amount of ETH in a smart contract. But the Shanghai update allows investors to unlock their capital and withdraw it.
- Upgrade smart contracts: As the largest blockchain, Ethereum supports many smart contracts. Due to the high power of the ETH network, these contracts are expected to be ahead of the rest in terms of development. The Shanghai Ethereum update provides the conditions for smart contracts to be developed more than before.
On what date will the Shanghai update take place?
According to reports, the Shanghai Ethereum hard fork will take place in the second half of 2023. Some people believe that this update will be implemented in September and others believe that the exact date of this update is March 2023. However, we have to wait and see the result. What is clear is that this update will happen in 2023 and will have a huge impact on ETH. Therefore, since this update will play an important role in improving the performance of Ethereum, it is better to read the news about the Shanghai ETH fork from Ethereum website Follow to find out the exact time of its implementation.
Impact of Shanghai Update on Ethereum price
ETH’s Shanghai update has caught the attention of Ethereum investors and traders. It cannot be said for sure that the implementation of EIP-4895 will have a positive effect on the price of Ethereum, but it will not be unaffected either. Because according to the data extracted from Staking Rewards, about 14.09% of all Ethereums are locked and cannot be withdrawn. Therefore, if Shanghai is implemented, all these assets will be withdrawn and this will increase liquidity in the market.
However, some experts believe that due to the reasonable price of ETH, most people will sell their holdings immediately after they are released. This issue can cause psychological pressure for Ethereum lovers and lead to a decrease in the price of Ethereum. So, traders and investors should be very alert so that they don’t face losses due to this update.
But there is another theory. Due to the decrease in the price of Ethereum from its ceiling, users are expected to hold their ETH. In fact, the increase in liquidity in the Ethereum market makes investors directly use Ethereum for profit. In other words, regardless of what happens with the Shanghai update, the release of assets and increased liquidity will result in a more balanced ETH market.
Shanghai update and its impact on ETH improvement
The Shanghai update is one of the attractive and practical plans that is presented with the aim of improving the performance of the Ethereum network. This update was finalized in early 2023 and is scheduled to be implemented in the second half of this year (March). The Shanghai upgrade will help reduce ETH transaction fees, improve smart contracts, and also withdraw investors’ locked assets. In fact, this update will increase the liquidity in the Ethereum market and establish more balance in this network. Therefore, it can be predicted that the Shanghai update plays an important role in improving the performance of this network and makes it easy for investors to use this network.
what is your opinion? How do you evaluate the impact of the Shanghai fork on the future of Ethereum?
What is the Shanghai Ethereum update? A full review of the Shanghai Ethereum fork first appeared on Wallex Blog. appeared.
