Ethereum blockchain enthusiasts are eagerly awaiting the completion of the blockchain’s historic transition to a fully functional proof-of-stake network through the much-anticipated Shanghai upgrade. The upgrade, also known as Shapella, is expected to enable the first-ever withdrawals of staked ether (ETH) and is scheduled to take place around 6:30 p.m. ET (22:30 UTC).
The epoch 194048 will mark the start of the Shanghai hard fork, allowing stakers to finally put their requests in for ether withdrawals immediately thereafter. Ethereum developers are feeling confident that the upgrade will go smoothly, having run through three different testnet upgrades that worked without any issues, although the last testnet upgrade did not finalize as quickly as anticipated due to not enough nodes upgrading in time.
To ensure that stakers can access withdrawals, developers have urged node operators to ensure they are running the latest version of their software clients. Further, the Ethereum Foundation has doubled its bug bounty program awards to $500,000 ahead of Shanghai to encourage individuals to report any vulnerabilities they could find.
Crypto market analysts have weighed in on how ether might trade as Shanghai goes live. According to a report from Coinbase, the performance of ETH will depend on the risk environment rather than any idiosyncrasies associated with the upgrade. If the trading environment sees risk assets selling off, people may decide to unstake and sell ETH just to de-risk, while institutions may not step in as aggressively on the buy side. However, some technicalities can limit the amount of ETH that can be unstaked at once, including the requirement that only 44% of nodes have changed their withdrawal credentials to the 0x01 address necessary to unstake partial or full withdrawals, and only 16 partial withdrawal requests can be submitted every 12 seconds.
Other crypto analysts suggest the Shanghai upgrade will have limited if any impact on the market for ether. “My suspicion is that this is going to be a non-event in terms of price,” said Brian Mosoff, CEO of technology company Ether Capital. He says that in the longer term, the successful implementation of a full, two-way staking system could attract big institutional investors, even if some early stakers move to cash out.
Overall, the Shanghai upgrade marks a significant milestone in the development of the Ethereum blockchain, enabling the first-ever withdrawals of staked ether and completing the transition to a fully functional proof-of-stake network. While the impact on the market for ether remains to be seen, the successful implementation of the upgrade could drive increased interest and investment in the Ethereum ecosystem, particularly from institutional investors.