The Ethereum network is the blockchain that leads innovation and offers more tools and development opportunities for developers and investors. Therefore, each stage of its development is eagerly awaited by the crypto community. And the next network update is already scheduled!
The Shanghai Update promises to bring even more incentives for investors to continue to trust Ethereum.
While we are sure that blockchain technology is here to stay and will still play a fundamental role in our lives, we know that there is still a long way to go before we can reach the point where there will be mass adoption. For this, blockchains need to be more scalable, secure and sustainable.
The good news is that there is a lot of effort on the part of the developers and progress is steady towards achieving this goal. The next step is the delivery of the Shanghai update to users of the Ethereum network, which should have a major impact on the crypto universe in the coming months. Let's understand this better!
As with all technologies, there is a constant quest to improve and perfect blockchains. And to make the process more transparent for the community, developers usually publish a Roadmap in which they present the stages of updates with their respective expected dates.
Each of these steps plays its part within a comprehensive plan aimed at making major upgrades to improve network performance, enhancing the user experience and paving the way for greater adoption. The last of these was Merge, in which Ethereum switched from Proof of Work to Proof of Stake.
Many people expected that it would be enough to make a significant transformation in network usage, but the fact is that no major changes were noticed by users. And that's because it was just the initial step in a chain of updates that will be fundamental in the evolution of Ethereum.
And the next step in the development of the Ethereum network is the Shanghai upgrade. Its relevance within the update schedule is an intermediate step between Merge and Surge (sharding), but very important because it will allow stakers to withdraw their rewards and stakes.
But even so, it will bring changes long awaited by users, mainly linked to the stake of Ethereum. Let's see what the main changes are and how they should impact the user experience.
The flagship of the Shanghai update is, without a doubt, the ability to unstake Ethereum. That's right! Maybe you don't remember, but since Merge, the validators who staked their tokens have been waiting for this update to be able to redeem them whenever they want.
Their confidence is so high that over 16 million ETH tokens have been staked with no guarantee as to when they can be withdrawn. And that's one of the reasons why Ethereum only has a volume of around 14% of tokens in stake, compared to an average of 60% on other Proof of Stake networks.
This is why this step is so important. It will give investors more confidence to become validators, thus increasing decentralization and, consequently, network security.
With the market giving signs of reaction to the Bear Market, we are already seeing a significant increase in Ethereum network gas fees compared to the last few months. And this has always been a major obstacle to Ether adoption. A transaction currently costs something around 15 dollars, but this value can exceed 80 dollars in a heated market.
One of the improvements that will be delivered in the Shanghai update aims to reduce gas fees during periods of high activity, to mainly benefit Ethereum developers. This should create an even greater incentive for new tools to emerge.
Ordinary users should not notice a very large change in the value of fees, but there should be some reduction. Is this or is this not excellent news?
The opening of the updated Ethereum network testnet for developers is already scheduled for February 28th. Thereafter, it is expected that a few weeks will be required to confirm the integrity and functionality of the network. The end user should have access to the updated network in the second half of March.
Delays can always happen, but the community is keeping a close eye on the development of the Shanghai update, and so far there is no reason to think there will be any setbacks. The expectation is that the update will happen imperceptibly and quickly, as it was with Merge.
The decrease in development cost and the possibility of unstake of ETH tokens are very important incentives for the network to continue to develop. While the general market has a lot of confidence that the upgrade will happen, seeing it working perfectly will make a big difference.
What is expected is that its arrival will cause a much larger volume of tokens to be staked, potentially increasing the price of ETH in the medium term. Of course, it's impossible to predict the effect of something like this, but considering the current scenario it's easy to believe that this is one of the possible effects.
In addition, the reduction of amounts spent on gas by developers should facilitate and speed up the delivery of new tools and functionalities by organizations on the Web3. So it is very likely that we will have a second half with many deliveries and the arrival of more new technologies.
If you already have the 32 ETH tokens at your disposal to become a validator, or are considering making that investment, these final steps of the Shanghai upgrade are definitely worth paying attention to. It's possible the rewards will decrease a bit as more investors come in, but the security of being able to cash out your tokens should balance the equation.
And even if you don't currently have the 32 ETH to be a validator, it's possible to stake on other platforms, including some decentralized ones like Lido Finance and Rocket Pool.
The market is in a relatively good moment, with a notable reaction in the price of the most important coins and important events approaching, such as the Bitcoin Halving that should happen in a year or so. So stay tuned. Much better days will come and you have to prepare for them now!
