In a major development coming out of the world of Ethereum, around 4 am on March 15, Indian Standard Time, the Ethereum Shanghai-Capella Upgrade (also called Shapella) was executed on the final Ethereum testnet, known as Goerli. Ethereum Shanghai upgrade has been one of the most anticipated events since the beginning of 2023 thanks to a series of new upgrades it brings along with it.
The Goerli Shapella upgrade has been on everyone's minds as it is sort of like the final dress rehearsal that the developers undertake before the Shanghai Capella Upgrade is implemented on the Ethereum mainnet. One of the biggest upgrades this hard fork is expected to implement is the EIP-4895, but more on that later.
The upgrade, however, did see some glitches starting off, as mentioned by Ethereum core developer Tim Beiko, in his Twitter thread. Beiko noted that while ETH deposits were being processed on the Goerli testnet, the network itself didn’t function as smoothly as was expected. Initial diagnostics indicate that this occurred because many of the testnet validators on Goerli did not upgrade their client software before the hard fork.
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The reason behind this performance issue was due to the fact that there is no financial incentive to actually run a testnet validator node. While testnets are extremely important to ensure that any upgrade pushed to the mainnet does not contain bugs or errors, running a blockchain testnet that mimics the mainnet isn't the most attractive thing. This is because there is a cost involved in running a node, even on the testnet while at the same time, the rewards generated for running the validator node on a testnet do not have any actual value. This makes Goerli’s ETH practically worthless - but that is its intended purpose too.
According to a tweet by another popular Ethereum researcher, Goerli, finalization took 15 epochs which caused some delays as the network participation was less than the mandated threshold of two-thirds.
Now coming to the upgrade itself. Ethereum's Shanghai Capella Upgrade (Shapella in short), has been one of the most awaited events in the crypto industry and out of the largest smart contract-capable network in the world - ever since the Ethereum Merge which took place on September 15, 2022. This is because the Shapella upgrade will implement the Ethereum Improvement Proposal - EIP-4895, which will essentially allow for the unstaking of ETH tokens from the Beacon Chain. Staking on the Beacon Chain began back in December 2020, when the proof-of-stake sidechain was launched and since then, the stipulated 32 ETH tokens have been locked for an indefinite period of time, until now. Thus, this would bring the one of the largest altcoins by market cap another step closer to becoming a fully functional proof-of-stake (PoS) blockchain.
This hard fork is expected to allow partial to even full withdrawals of staked ETH tokens on the Beacon Chain and theoretically unlock 17.6 million ETH tokens locked. This amounts to about $30 billion as of writing, once the Shapella hard fork is implemented on the mainnet.
However, according to the Ethereum Foundation, there are several mechanisms in place to prevent the sudden ETH supply from flooding the market. The Shapella upgrade will enable a phased validator withdrawal mechanism to ensure that.
With the Goerli testnet Shanghai Capella upgrade finally underway, the only thing left to do is the mainnet upgrade. While there isn't a date finalized for this, it is widely expected to occur sometime in the month of April. This was earlier estimated to happen by March but was then later pushed thanks to delays in the Sepolia and Goerli testnet executions.
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