Ethereum investors are inching closer to accessing their staked ETH after the network’s developers announced a new date for the highly anticipated Shanghai upgrade. The set date is April 12, after Ethereum’s core developers met on March 16.
The shift is bringing some flux into the 18M ETH market.
What is the Shanghai Upgrade?
The Shanghai upgrade is an upcoming Ethereum upgrade that will enable staked ETH withdrawals. In the past, the staking of ETH has been a one-way street in that validators could deposit ETH to the Beacon Chain to support Proof-of-Stake on Ethereum but not withdraw it. The upgrade is set to enable these withdrawals.
The primary highlight of the upgrade is the Ethereum improvement proposal (EIP) 4895, which will allow validator staking withdrawals on the leading network. This critical feature was not included during Ethereum’s transition to proof-of-stake (PoS) consensus after last year’s merge upgrade.
Ethereum Shanghai Upgrade on April 12
With the upgrade set to happen next week, the number of active daily Ethereum addresses has increased. On-chain activity for the network has also seen an upsurge. This may be related to the current ETH price movements, with the anticipation of the scheduled upgrade.
The Shanghai upgrade (Shapella), on the day of the launch, will conjoin changes to the Ethereum Virtual Machine (EVM) and the Capella consensus layer. As such, there will be a phased release of ETH staked on the Beacon Chain from December 2020.
Additionally, the Shanghai upgrade will bring about the implementation of the sharding protocol. Sharding is a scalability solution enabling the Ethereum network to process more transactions.
Will ETH Dump After the Upgrade?
It is so easy to think that the Shanghai Upgrade will cause short-term selling pressure, which will likely be significant for both ETH and Alts. However, it is clear that over 57% of ETH, stakers have been able to access liquidity. This is with their principal and rewards, which has been happening for a while. As such, it is thus not a worry that this group of users has reasons to sell off after the upgrade.
However, there are projections that the Shanghai upgrade will likely positively impact Ethereum’s price, considering that before the merge upgrade, there was a significant influx of capital, which appeared to be a case of “buy the rumor, sell the news.”
The upgrade will introduce more staking options, which could be a positive development for Ethereum’s value. Additionally, it will give room for the release of staked ETH, a possible bullish trigger.