The long-awaited ‘Shanghai upgrade’ was implemented on April 12, 2023, at 22:27 UTC, with epoch 6209536 completing Ethereum’s transition from Proof of Work (PoW) to Proof of Stake (PoS). The upgrade comes 7 months after the major upgrade that integrated Ethereum mainnet (PoW) with the Beacon Chain (PoS chain) known as ‘the Merge.’
Although Ethereum switched to the PoS mechanism, validators could still not withdraw staked Ether. This is why the Shanghai upgrade was highly anticipated. It allows access to over 17 million ETH locked since the release of the Beacon Chain in December 2020.
What Is the Ethereum Shanghai Upgrade?
The Shanghai upgrade, or Shanghai hard fork, is the most recent upgrade the Ethereum network underwent. It brought several significant improvements—staking withdrawals—and other minor ones to the chain. Another change comes with the Shanghai upgrade, which will improve the Consensus Layer known as the Capella Upgrade. This is named Shapella, a combination of Shanghai + Capella.
Ethereum users should not be confused about the new term—Shapella—that came with the Shanghai upgrade since crypto enthusiasts use it interchangeably with Shanghai.
What Came Before the Shanghai Upgrade?
As with previous upgrades, there were testnets, as seen in the table below, which allowed developers to check for bugs and other issues before the launch. Developers kick-started the journey toward the Shanghai upgrade with the following:
|October 17, 2022
|Shanghai upgrade Sepolia testnet
|February 28, 2023
|Shanghai upgrade Goerli testnet (Final testnet)
|March 14, 2023
The hard fork occurred after the last testnet—Goerli—which launched on March 14, as agreed upon by the developers during the meeting.
The Goerli testnet allowed developers to test the staking withdrawal, the most significant improvement with the Shapella. After its final run-through on the Goerli testnet, the hard fork was implemented on the mainnet on April 12.
The Ethereum Improvements That Came With the Shanghai
Beacon Chain Withdrawals
The most important improvement of the Ethereum Shanghai upgrade launch is the activation of Beacon Chain withdrawals. After several proposals, the Ethereum network settled with the EIP-4895: Beacon chain push withdrawals as operations. EIP-4895 will allow Beacon Chain holders to withdraw their staked ETH and accumulated rewards. In addition, it will add a system-level ‘operation’ to ‘push’ validator withdrawals from the beacon chain to the EVM. These operations generate unconditional balance increases for the recipients specified.
There are two kinds of withdrawals: full and partial withdrawals. Full and partial withdrawals will be available. Validators can quit their stake by fully withdrawing, collecting their whole ETH balance, and whatever rewards they may have earned. Validators can only obtain the excess (balances exceeding the 32 ETH required to maintain a validator node) through partial withdrawals. 16 validators will be able to withdraw a portion of their holdings within each block that is added to the network.
More of the Ethereum Improvements Proposals
Following the Pre-Shanghai testnet—Shandong—launched in October 2022, Ethereum DevOps introduced minor improvement proposals, including EIP-3670: EOF-Code Validation. The others are:
1. EIP-3651: Warm COINBASE. The COINBASE addresses will change from the initially ‘cold’ to ‘warm’ through the Shanghai hard fork. As a result, when validating blocks, network validators can receive transaction fees. In addition, gas fees will be reduced for network builders, one of the most important network players, to carry out their advanced transactions because they won’t have to pay for unsuccessful transactions any longer.
2. EIP-3855: PUSH0 Instruction. With the aid of this EIP, the Ethereum Virtual Machine (EVM) will receive a new command that will enable smart contracts to become smaller and optimize contract code.
3. EIP-3860: Limit and Meter Initcode. The EIP sets a maximum size limit for the initcode at 49152. In addition, for each 32-byte block of initcode, a charge of 2 gas is added to indicate the value of jumpdest-analysis.
4. EIP-6049: Deprecate SELFDESTRUCT. This EIP is a deprecating warning to alert developers against creating contracts that depend on SELFDESTRUCT.
The Ethereum Shanghai update or Shapella has been released. And though there were some delays, it was still within the ‘6-12 months after the merge’ schedule reported after the Merge. This journey has been quite interesting following the various news we have gotten along the way and the testnets used by the developers to pave the way for Shanghai.
We can only wait to see how well the upgrade works for the Ethereum network and its users.
1. What date is the Ethereum Shanghai upgrade?
The Shanghai upgrade happened on April 12, 2023.
2. What is the Ethereum Shanghai upgrade?
The Shanghai upgrade is the next upgrade that happened after the merge. The upgrade will allow the withdrawal of staked Ethereum on the Beacon chain, and add other improvements.
3. What happens to Ethereum following the Shanghai upgrade?
Following the upgrade, the functionality of Ethereum is set to improve. It will also allow ETH validators to withdraw staked Ether, which is the most important part of the upgrade to complete the Ethereum Network’s transition to PoS.
4. Will the Ethereum Shanghai upgrade increase ETH price?
It is complicated to say whether the upgrade will increase the price of ETH since upgrades like these do not guarantee an increase in the value of an asset. However, following the Shanghai upgrade release, the price of ETH rose over 6%, hitting the $2,000 mark (as of April 13).