The wait for one of Ethereum’s most exciting upgrades is nearly over, with the Ethereum’s Shanghai upgrade potentially landing in Ethereum’s mainnet in the first two weeks of April. The upgrade will enable the long anticipated withdrawal of previously staked ETH and users should be able to quickly reap the rewards they put up with the network.
Ethereum developers had a bi-weekly call on Thursday and set the upcoming March 14 as the date for Goerli testnet, the comprehensive rehearsal of the Shanghai upgrade. Following closely the exact timing of the upgrade, developers removed other planned updates and even avoided adding minor technical tweaks to speed up the release of Shanghai.
Given that this upgrade brings with it a staggering financial implication, it has become a closely watched phenomenon in the crypto world. Since staking began in December 2020, Elliott Capital Management reported that an estimated of $28.7 billion of ETH has been deposited in the network, representing about 14.5% of all ETH in circulation. With such an amount of money at stake, it’s clear why Ethereum developers are eager to get Shanghai up and running; not to mention that the top four intermediaries staking with Ethereum (Lido, Coinbase, Kraken, and Binance) are currently accounting for 56% of all ETH staked and have a clear incentive to start churning out staked ETH rewards. JP Morgan research even projects that Coinbase alone could earn up to $545 million in staking revenue.
The impact of Shanghai upgrade is expected to shake up the Ethereum ecosystem, opening up new opportunities for staked ETH rewards and driving a renewed interest in the Ethereum network. CoinDesk reported that on a recent Ethereum call, the Sepolia testnet successfully went through a “Sha Pesh” upgrade, which boosted the confidence that this upgrade will launch on the mainnet in April.
Ethereum developers are scrambling to get the upgrade done as fast as possible, and have initially targeted a March date, though have slipped slightly given the unexpected complexity. Micah Zoltu, one of the core developers, raised a valid concern about the long-term health of the network saying: “It feels like we’re not thinking about the long-term health of Ethereum. We’re thinking, ‘How do we do what the public wants, today?’
The actual impact of the Shanghai upgrade remains to be seen and a lot of hype is building around it, with several financial enterprises and investors, especially those who experienced the crypto winter, speculating the positive, financial implications of it. Will the April data live up to these expectations? Only time will tell.