Shanghai will be the next major Ethereum upgrade that will allow users to withdraw staking locked ETH.
Before being deployed to the Ethereum mainnet, updates are tested on testnets, where Developers can test and experiment with new features within a safe environment, in which any change can be controlled and reverted.
Now, Ethereum developers have announced the creation of Shandong, which will be the testnet for the next major network upgrade, the long-awaited Shanghai. Those responsible expect it to be available sometime in 2023 and it will be the first major update from The Merge.
Why is Shanghai so important for Ethereum?
The Merge marked a before and after in the history of Ethereum, changing your consensus mechanism from a Proof-of-Work based on mining, to a Proof-of-Stake based on node validation.
Since the creation of the Beacon Chain, To become an Ethereum validator, users could block 32 ETH in nodes. However, at the moment, it is impossible to withdraw this locked ETH, in exchange they receive liquidity tokens, such as stETH, which are 1:1 representations of your locked tokens.
The Shanghai update will bring with it the improvement proposal EIP 4895, which will allow users who have ETH locked in Beacon Chain validation nodes to withdraw it along with the rewards that they have obtained throughout the time.
What other improvements will Shanghai implement?
Beyond the expected possibility of withdrawing the blocked ETH, Shanghai intends fix some performance and scalability issues from Ethereum.
In this sense, the next update will introduce sharding in Ethereum for the first time, through the EIP 4844, which presents a “proto-dankshardign” system which will improve the processing capacity of the network and is therefore expected to decrease gas prices.
It will also be implemented EIP 3540, related to the hard fork London, which will allow separate code and data in smart contracts, making changes to the EVM be much easier in the future.
For now, the list of improvement proposals that will be introduced with Shanghai is provisional and surely Many more improvements will be introduced in the future.
This way, Ethereum developers will be able to test the proposals and work with them to find any possible problems.
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