Following a successful transition to Proof-of-Stake (PoS), Ethereum (ETH) developers have now set February 2023 for the public testnet for the Shanghai hard fork ahead of the main implementation in March with a focus on stake withdrawals.
According to the development team in a recent All Core Developers (ACD) meeting, users will now have access to locked Ether after the upcoming hard fork. Interestingly, the new development will afford users the opportunity to stake Ether withdrawals and also have access to the currencies already staked on the network. Hence, the need for the testnet so as to avoid future problems once implemented.
However, since the main focus is on Stake withdrawals, developers concluded during the meeting to ensure that codes related to Ethereum Virtual Machine- EVM Object Format (EOF) are temporarily removed from Shanghai now, until later. All these efforts put together by developers are to ensure the hard fork implementation experiences no issues as well as setbacks.
Undoubtedly, the Shanghai hard fork is the next big project for the Ethereum development team since after the merge where it transitioned from an energy-intensive proof-of-work (PoW) network to a proof-of-stake mechanism. It is therefore the priority for 2023 and the developers are working on the code changes that might likely delay its launch timeline which is expected to be in March.
Analysts React to Ethereum’s Shanghai Upgrade
Meanwhile, market analysts worry that the Shanghai upgrade could result in price volatility hitting the Ethereum market since users will be accessing their staked token for the first time since the proof-of-stake Beacon Chain launched.
About 15 million ether worth over $20 billion is currently locked. A rush to cash out might create sell-side pressure that will push the price of Ethereum down. However, some other analysts argue that since this is the first upgrade after the merge, the Shanghai upgrade could push up the price of Ethereum.
These analysts argue that the upgrade will attract more users to stake Ether to earn yield. In comparison to other proof-of-stake blockchains, ETH with 13.79% has the lowest staking ratio as per data from Staking Rewards. This could change if more users including institutions join in, after the upgrade.
