Ethereum Set to Undergo Shanghai Update in March, Here’s What It Means

Ethereum's blockchain upgrade will also bring fixes and small improvements to its infrastructure.

Written by Radhika Parashar, Edited by Richa Sharma | Updated: 12 January 2023 17:13 IST

Highlights

Ethereum blockchain has over 15 million tokens staked
Staking tokens helps validators verify transactions
Ether prices could see fluctuations in the coming days

Ethereum Set to Undergo Shanghai Update in March, Here’s What It Means

Called the Merge, Ethereum’s upgrade to PoS completed in September 2022

Photo Credit: Unsplash/ Shubham Dhage

Ethereum, the world's most commercialised blockchain, is set to see the completion of another historic update, called the Shanghai update. As of now, people who staked Ether tokens to validate the blockchain had no way to withdraw their tokens. It is estimated that $22.38 billion (roughly Rs. 1,82,520 crore) worth of Ether tokens are currently staked on the blockchain. Around March, when the upgrade is slated to be complete, it will change the situation.

The amount of staked ETH spiked when Ethereum was preparing to switch from its power-intensive Proof-of-Work (PoW) module to a green alternative. That eco-friendly module is called the ‘Proof-of-Stake' (PoS).

In PoS, blockchain validators stake their personal Ether tokens to create new blocks and verify transactions. In return, stakers get interest on their tokens.

El Salvador Passes Bitcoin Bonds Bill Ahead of 'Volcano Bonds'

Called the Merge, Ethereum's upgrade to PoS successfully completed in September last year.

Some people will be able to withdraw ETH that have been staked since 2020, in a first opportunity to do so.

As per Blockonomi, over 15 million Ether tokens are currently staked at the network.

WazirX Holds 92 Percent of Total $285 million Reserves in Binance Wallets

After March, PoS Ethereum validators would get a choice to either keep their tokens staked or withdraw them.

When staked ETH tokens are open to be withdrawn, it could encourage more people to become part of the network.

Ethereum's Shanghai upgrade is due in March 2023, enabling withdrawals from the beacon chain.

This allows ETH currently staked in ETH2.0 validators to be unstaked and withdrawn.

Here's Arkham's primer on Liquid Staking Derivatives, and what we can see happening on-chain :point_down: pic.twitter.com/moQG9Jjtbb
— Arkham | Crypto Intelligence (@ArkhamIntel) January 10, 2023

When the update completes, it could shake Ether's value point, which at the time of writing stands at $1,398 (roughly Rs. 1.10 lakh).

Ethereum developers are reportedly looking to launch a public testnet for the Shanghai update in February.

The blockchain upgrade will also bring fixes and small improvements to its infrastructure.

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Also seeCryptocurrency Prices across Indian exchanges

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.