Cryptocurrencies have grown in popularity over the years, with Ethereum being one of the most extensively utilised. Ethereum has undergone numerous improvements since its launch in 2015 in order to increase its efficiency and security. The Shapella upgrade is one of the most recent updates to the Ethereum network, and it has created quite a stir in the crypto industry.
Outline
- I. Introduction
- II. Understanding Ethereum Fork
- III. What is Shapella?
- IV. Impact of Shanghai Fork
- V. Conclusion
Introduction
Definition of Ethereum
Ethereum, a blockchain-based infrastructure that is publicly available and transparent, enables software developers to create decentralised apps. Vitalik Buterin, a visionary, conceived and created it in 2013, and it was unveiled to the public in 2015. The primary purpose of Ethereum is to create a unified platform for executing smart contracts and decentralised applications (dApps) that are immune to interruptions, deception, or interference from outside actors.
History of Ethereum
Ethereum’s network has a long history of modifications aimed at improving its usefulness and security. The Homestead upgrade to the Ethereum network was the first in 2016. Several other upgrades have occurred since then, including Byzantium and Constantinople.
Ethereum Network Upgrade
An Ethereum network update refers to the process of improving the functionality and security of the Ethereum software. These improvements are critical to the Ethereum network because they improve its functionality, making it more efficient and secure.
Understanding Ethereum Fork
What is a Fork?
A blockchain fork is the process of establishing a new version of the blockchain. A fork means when a group of developers decides to construct a new blockchain that is identical to the original but with significant changes. A fork can be either soft or hard.
Types of Forks
In the world of blockchain, there are two types of forks: soft forks and hard forks. Soft forks are backward-compatible updates that require only a majority of the network’s hash rate to perform. Hard forks, on the other hand, signify non-backward-compatible upgrades that require all nodes to update to the most recent software version.
Why Fork Ethereum Network?
There could be various reasons for forking the Ethereum network. One motivation is to address network problems or vulnerabilities. Another motivation would be to increase network efficiency, scalability, or security. Forks can also arise as a result of arguments within the Ethereum community about the network’s future direction.
What is Shapella?
“Shapella” is the savvy merger of Shanghai and Capella, the brightest star in the Auriga constellation. This upgrade combines the legacy execution layer with the new proof-of-stake consensus layer, with the former undergoing the Shanghai upgrade and the latter performing the Capella upgrade. So, let’s give it up for “Shapella” – the ultimate upgrade for developers!
Overview of Shanghai Fork
The Shanghai Fork is the Ethereum network’s most recent network upgrade. On April 12th, 2023, a hard fork occurred at epoch number 194,048. The upgrade contains many Ethereum network improvements, including the implementation of EIP-4895.
Reasons for the Fork
The purpose of the Shanghai Fork was to enhance the efficiency of the Ethereum network and reduce the transaction fees. The fork’s EIP-4895 protocol for which people are eagerly anticipating the “Shapella” upgrade because it will introduce Ethereum Improvement Proposal-4895. This proposal will enable validator withdrawals, which is why it’s generating so much excitement.
Which are the two layers on Ethereum?
When it comes to the Ethereum protocol, there are two layers to consider: the execution layer and the consensus layer. Each of these layers has its own name for the upgrade that’s currently in the works. On the execution layer, it’s known as the “Shanghai” upgrade, while on the consensus layer, it goes by “Capella.” To simplify things, developers have combined these names and dubbed the upgrade “Shapella.”
Differences between Shanghai Fork/Shapella Fork and Previous Forks
The Shapella upgrade, a significant development in the Ethereum ecosystem, has introduced a new feature that allows validators to withdraw their staked tokens. This new functionality is aligned with Ethereum Improvement Proposal-4895, also known as EIP-4895. Validators have staked a staggering 16 million ETH to help secure the blockchain’s consensus mechanism. Since the Merge in September 2022, validators have become even more essential to the Ethereum blockchain, as the consensus mechanism has shifted from proof-of-work to proof-of-stake. Validators who stake 32 ETH in the chain can participate in validating blocks, and each staked ETH increases the chances of a validator receiving block rewards in accordance with the new post-Merge rules.
During the Merge, validators were required to lock up their ETH and any earned rewards until a later chain update. However, despite the Merge taking place in 2022, validators have been staking ETH since December 2020, when the Beacon Chain, which relies on proof-of-stake as its mechanism, was introduced.
Impact of Shanghai Fork
How Does Shapella upgrade affect Validators?
Shapella hard fork delivers validators excellent news: quickly unlock your staked ETH! Saying good-bye to locked-up tokens is now available with the opportunity to freely withdraw. Given Ethereum’s strong position in DeFi and the alluring staking yield, some experts continue to have their doubts about this decision, but others believe it will change the game.
There are two options for individuals who decide to unstake: either withdraw your earned prizes or unstake 32 ETH to completely leave the Beacon Chain. You get to decide!
Future of Ethereum Network
EIP-4895 paves the door for the hard fork of Ethereum, releasing the full potential of Shapella! Alongside it are other EIPs that aim to lower gas prices during periods of high network traffic for the platform’s developers. The EIPs EIP-3651, EIP-3855, EIP-3860, and EIP-6049 are some of these lesser upgrades.
Shapella might not be as big as the Merge, but it still has a lot of potential for anyone who have staked ETH on the chain. The future of Ethereum seems promising, especially with additional advancements like sharding and upgrades to the Ethereum Virtual Machine scheduled for 2023!
Conclusion
From The Merge to The Splurge, Shapella’s got it all! Right now, we’re at stage one, The Merge, working hard towards a PoS Consensus that’s simple, robust, and decentralized. But hold on tight, because The Surge is coming, aiming to skyrocket Ethereum’s transaction speed to over 100,000 transactions per second and beyond. Are you ready to take Shapella to The Verge of greatness?
FAQs
What is the Shanghai Fork?
The Shanghai Fork is the Ethereum network’s most recent network upgrade, which includes the implementation of the EIP-1559 and EIP-3675 protocols.
Why was the Shanghai Fork implemented?
The Shanghai Fork was made to increase the efficiency of the Ethereum network and lower transaction fees.
What is the EIP-1559 protocol?
The EIP-1559 protocol is a technique that streamlines the charge structure and increases the predictability of transaction costs. It also features a method for burning a percentage of transaction fees, so lowering the overall supply of Ethereum.
What is EIP-4895 protocol?
EIP-4895 is an Ethereum Improvement Proposal that enables validators to withdraw their 32 ETH stake from the staking contract on the Ethereum blockchain following the switch to Proof-of-Stake (PoS) as part of the Shanghai hard fork of the Shapella Upgrade.