Ethereum’s Shanghai Upgrade Coming Soon

Ethereum's Shanghai Upgrade Coming Soon

The upcoming Shanghai upgrade for Ethereum will enable staked ETH withdrawals from the Beacon Chain, as well as feature five Ethereum Improvement Proposals.

The Ethereum ecosystem is set to undergo another major change as the highly anticipated Shanghai upgrade approaches. The upgrade will enable Ether withdrawals from Ethereum’s Beacon Chain, marking a significant milestone for the blockchain platform.

The upgrade, which features a handful of Ethereum Improvement Proposals (EIPs), will activate staking withdrawals, allowing validators to withdraw their staked holdings from the Beacon Chain. Validator balances are capped at 32 ETH, but staking smaller amounts of ETH still allows users to earn a share of rewards, similar to an interest-bearing account.

Shanghai refers to changes to Ethereum’s execution layer, mainly enabling staked ETH to be deposited to execution layer wallets, while Capella refers to the simultaneous change to the Beacon Chain. The upcoming upgrade is called Shapella, combining the names of both upgrades.

The upgrade features five EIPs, with EIP-4895 enabling users to withdraw from the Ethereum staking contract, which had previously been locked. The other four EIPs – EIP-3651, EIP-3855, EIP-3860, and EIP-6049 – make changes to Ethereum’s gas costs to correct overpriced or underpriced operations and give added benefits to users and developers, opening up new use cases.

Matt Nelson, ConsenSys Hyperledger-Besu and Web3 senior product manager, explained the impact of each of the EIPs. EIP-3651 looks to lower the gas cost of accessing a coinbase address, allowing users that submit transactions to pay validators directly in specific conditions. EIP-3860 applies a new cost to the initcode that scales in correlation to the size of the “initcode” to ensure handling that contract creation is costed appropriately.

Lastly, EIP-3855 carries out a straightforward and simple change to the Ethereum Virtual Machine (EVM) and gas costing, making it cheaper to store a value of zero on the execution stack.


About Dren Hima

Being exposed to the crypto industry for the last few years has given me valuable experience with market analyses (technical and fundamental) as well as blockchain technology in general. As the content editor and a market analyst of Walletor, I strive to share the latest developments of the crypto industry, while also providing a unique educational experience for all Crypto & FinTech enthusiasts.