Ethereum (ETH) upgrade Shanghai: developers disagree on important detail

Jan 23, 2023

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Ethereum (ETH) upgrade Shanghai: developers disagree on important detail

Originally posted here.
By: Stephan Fiedler

Overview

Ethereum’s Upgrade Shanghai has been announced for March, which is intended to enable the withdrawal of clocked ETH once again. But some developers believe the […]

The Post

Ethereum’s Upgrade Shanghai has been announced for March, which is intended to enable the withdrawal of clocked ETH once again. But some developers believe the plan is technologically immature.

Ethereum expects the upgrade Shanghai for March, which is supposed to bring the option to be able to withdraw staked ETH again. For Ethereum investors, this is an important date because currently more than 13 percent of all ETH worth more than $20 billion is stored in the staking and is tied up there. So listen closely when Ethereum developers discuss progress at Shanghai. And here, there have recently been objections from individual experts who think that Shanghai is relying on outdated technology when it comes to unstaking and that the launch should therefore be postponed.

In essence, this is about the method with which staking on Ethereum becomes reversible again by Shanghai. For this, ETH must be rewritten from the beacon chain to the actual Ethereum blockchain. In the Shanghai upgrade, this is supposed to happen through RLP code, while Ethereum generally relies on more modern SZZ code for the future. This difference could complicate Ethereum’s network in the future, because with RLP, a code that is actually being phased out would be retained, say the developers, who prefer a clean solution and also consider a delay of Shanghai to be justified for this. One should not always be pushed by the expectations of the markets, they say.

In the end, however, the majority of ETH developers decided to go ahead with Shanghai as planned. The code issue could then be addressed with the next upgrade called Cancun, the compromise reads. Observers note that the discussion among developers also reflects the balancing act Ethereum is attempting between technological advances and demands on the monetized ecosystem. When Ethereum changed its protocol with “The Merge” in September 2022, it was communicated late that Unstaking from ETH was not yet included and would be delivered later with Shanghai.

Conclusion: Upgrade Shanghai at Ethereum is approaching

Indeed, the upcoming upgrade Shanghai on Ethereum has the potential to impact the price curve of ETH. In some cases, the billions in ETH staking have been stored there for 25 months, and during that time Ethereum’s price has more than doubled. If unstaking now occurs with Shanghai, massive amounts of ETH could flow into the markets, according to fears. The technological aspect plays less of a role here and so it is probably to be welcomed that the Ethereum developers vow to stick to their original plans for Shanghai.

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