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- 1 Ethereum’s Shapella / Shanghai Upgrade is scheduled for tomorrow, April 12.
- 2 The upgrade would allow 15% of staked ETH to be un-staked.
Shapella upgrade is due tomorrow, April 12, and would allow the investor to finally access $33 billion staked ETH. Shanghai Upgrade, aka Shapella Upgrade, would enable the validators to redeem the staked Ether, which they have deposited and locked in the network for the last three years, awaiting interest. Shapella’s main agenda is changing the execution layer (Shanghai), the consensus layer (Capella), and the Engine API.
The Shapella upgrade would finally end a three-year-long waiting period for the ETH staker, which began in 2020. Ethereum, with its last hard fork, the Merge, shifted from Proof-of-Work (PoW) to Proof-of-Stake (PoS), where investors staked 32 ETH to become validators on the network. They were promised to earn new Ethers on top of their staked coins.
The un-staking of the ETH would bring the liquidity back into the system, which could be used in multiple ways like lending, borrowing, trading, etc., thereby increasing the volume and hence the price.
Shapella Upgrade is Coming Tomorrow
With this upgrade, almost 15% of the total Ether worth $33.73 Billion would be available for grasp. But these ETH might not be available in stages, as it would be a scheduled withdrawal with timings distributed in weeks. Liquid stakers would have to wait some more due to added complexity.
Nearly 1.1 Million ETH would be available for withdrawal from the Shapella Upgrade in a week. This was estimated by the CEO of Attestant, Sreejith Das; his company facilitates Ether staking. The available ETH would be worth nearly $2 Billion concerning the latest price.
Experienced traders expect short-term volatility in Ethereum following the upgrade, mostly because of increased volatility and selling pressure. When multiple staked ETH comes into the market through un-staking, there might be an increase in selling pressure and a possible drop in the Ethereum price.
- Only about 29% of staked ETH are currently in profit concerning USD.
- This means that the majority of un-staking could be for a loss.
- Therefore, assumptions are the selling pressure might not be as expected.
Probable Issues That May Occur When Shapella Goes Live
However, there is a fear of a withdrawal influx and a possible price drop. Still, aside, the Shapella upgrade is designed to benefit the Ethereum Network. The scheduled withdrawals are expected to begin in May 2023, and as the scale of the project is massive, it could take months to complete.
Moreover, during such intense traffic, the network could be vulnerable, and hackers might try to exploit the situation; hence, a mechanism must be in place to handle the situation. The system might have glitches when the upgrade goes live; previous testing results were also not encouraging as many computers were incompatible with the latest upgrade, and the transaction time was far greater than required. Developers are trying to facilitate a seamless change of software.
These are only expected problems that might occur, but as promising as the Shapella Upgrade is, it could benefit the Ethereum ecosystem in the long run.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
