{"id":6820,"date":"2023-04-18T03:43:32","date_gmt":"2023-04-18T03:43:32","guid":{"rendered":"http:\/\/monsterblockhk.com\/?p=6820"},"modified":"2026-05-04T08:45:32","modified_gmt":"2026-05-04T00:45:32","slug":"ethereum-shanghai","status":"publish","type":"post","link":"https:\/\/monsterblockhk.com\/en\/ethereum-shanghai\/","title":{"rendered":"EtherNet has completed its Shanghai upgrade\uff5cEverything You Need to Know"},"content":{"rendered":"
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The much-anticipated EtherShanghai upgrade (also known as Shapella) was officially launched on April 13, 2023 at around 6:30am Hong Kong time when the mainnet reached \"Epoch 194,048\", announcing that verifiers are now able to withdraw ETH from the beacon chain and bring new functionality to the executive and consensus layers.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Recent Ether Upgrades<\/h1>\t\t\t\t<\/div>\n\t\t\t\t
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Vitalik Buterin, the founder of Ether, said, \"The hardest and most important steps in the transformation of the Ether protocol have now been taken and need to be taken as quickly as possible. While there are still some major upgrades to be completed, they can be done at a relatively slow pace.<\/b><\/span><\/p><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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It is worth noting that, following the merger of Ethereum with Ethereum Merge, the EtherShanghai upgrade is another major event in the history of the Ether blockchain, and can be considered as a symbol of the completion of the Proof of Stake for Ether.<\/span><\/span><\/p>

One of the main goals of the EtherShanghai upgrade was to open up withdrawals of Ether (ETH) pledged to smart contracts on the Ether Beacon Chain. Within half an hour after the upgrade was completed, there were 285 withdrawal requests for 5,413 Ether from 194,408 blocks.<\/span>
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Last year's Ether merger allowed Ether holders to lock their Ether into smart contracts on the Ether Beacon Chain. Now that the EtherShanghai upgrade has been successfully completed, a large amount of Ether will be able to be unlocked, which, in addition to being a major event in the development of the city's blockchain, will have a significant impact on the market that is worth paying attention to.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What is Ether Merge<\/h1>\t\t\t\t<\/div>\n\t\t\t\t
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It is called a \"merger\" because it is a merger of two separate blockchains currently running in parallel, with the main Ether network being \"merged\" earlier with a special-purpose blockchain called the Beacon Chain.<\/b><\/span><\/p><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The Beacon Chain was launched on December 1, 2020 for the sole purpose of \"being a Proof of Stake blockchain\". There are no transactions on the Beacon Chain, no Token or DeFi applications, it's just a blockchain designed to be a PoS consensus mechanism.<\/span><\/span><\/p>

Because the Beacon Chain is an \"empty chain\", it can be merged with the Ethernet Blockchain and replace Ethernet's PoW consensus mechanism without having to worry about any other variables, and once the two chains are merged, Ethernet's PoW authentication will be replaced by a brand new PoS consensus mechanism.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The merger is considered to be one of the most important events in the history of cryptocurrency since the birth of the Bitcoin Founding Block.<\/b><\/span><\/span><\/p>

No blockchain in the history of cryptocurrencies has ever undergone such a significant change, and it is rare to see a change in the mechanics of blockchain operations, let alone a change in a blockchain with a large on-chain economy, except for Ether. The market capitalization of ETH assets today is $245 billion (up from $550 billion), with hundreds of millions of dollars in value based on its network.<\/span><\/span><\/p>

In addition.<\/span><\/span>The merger has already had a huge impact on the ETH economy: reducing the amount of ETH issued.<\/span><\/span><\/b><\/p>

According to Ultra Sound Money<\/a><\/u> The data shows that the merger reduces the annual inflation of ETH from 4.3% to 0.34% because of the fundamental efficiency improvements that will result from the PoS consensus mechanism, which is designed to provide the highest level of blockchain security at the lowest possible cost. By reducing the amount of ETH issued to maintain security, these cost savings will benefit ETH.<\/span>
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What will be the impact of the Shanghai upgrade?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t
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The shift from Ether to PoS has sparked a new DeFi circuit, Liquid Staking Derivates (LSD), which has become one of the hottest stories in the industry since the first half of 2023, and the recent completion of an upgrade in Shanghai has made pledged Ether redeemable at any time, giving the LSD circuit a chance to become the next bullish story. The LSD circuit has the potential to become the next bull market narrative!<\/b><\/span><\/span><\/p><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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What's LSD?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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Previously, Ether block production was similar to the Bitcoin mechanism, where PoW miners were rewarded with ETH for producing blocks through their graphics cards.<\/span><\/span><\/p>

True POS was not realized until The Merge upgrade in the second half of 2022, when Ether officially entered the 2.0 era.<\/span><\/span><\/p>

A significant change in Ether 2.0 is that ETH 2.0 verifiers only need to pledge 32 ETH to participate in the consensus mechanism of the 2.0 ecosystem to be rewarded, i.e., changing the traditional way of being rewarded through the production of blocks of graphics card power.<\/span><\/span><\/p>

Beginning December 1, 2020, users will be able to pledge ETH on Ether's Beacon Chain, which is also the opening of the Liquidity Staking Track LSD.<\/b><\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Until December 2021, Ether 2.0 pledges had been running for nearly a year, and at that time, the number of ETHs participating in Ether 2.0 pledges had exceeded 8.75 million, and the amount of pledges accounted for more than 14.28 % of the total amount of Ether in circulation, with a total of about 270,000 verifiers.<\/span><\/span><\/p>

Immediately after the just completed EtherShanghai upgrade, the redemption function of pledged ETH was opened, which means that pledged users can start to get back their ETH.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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The earliest deposits have been made since November 20, before the launch of the beacon chain. From then until now, pledgers have not been able to take their ETH. in the intervening two years, they have all experienced bulls and bears, so it is reasonable to assume that ETH will face some selling pressure after the upgrade. Depositors are the main pledge participants, as they can have multiple verifiers, so the final decision to withdraw and use funds will depend heavily on the depositor.<\/span><\/span><\/p>

According to Glassnode's on-link data report, we can see that the majority of Depositors fall in the six-month to one-year age range, reflecting growing confidence in Ether's pledge mechanism over the past year, especially after the successful execution of the merger and the prospect of withdrawals in the near future.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Considering partial and full withdrawals, it is possible to anticipate potential selling pressure in the first week after the upgrade. There are three scenarios below to predict whether the unlocked ETH will be sold by the holders.<\/span><\/span><\/p>

  1. In the most extreme case, the total cumulative Pledge Bonus and the maximum weekly allowed Pledge Volume will be withdrawn and sold, and a total of 1.54 million ETH ($2.93B) will become liquid.<\/span><\/span><\/li>
  2. The current status is that only 00\u00d70 certificates have been rewarded with a pledge and 45,000 ETH can be withdrawn and sold, in which case there will be about 312,000 ETH ($592 million) available for liquidity in the first week.<\/span><\/span><\/li>
  3. A best estimate based on 50%'s Withdrawal Certificate Update, the categorization of depositors, and everyone's beliefs and profitability assumptions, coupled with the belief that the current number of withdrawing verifiers will increase before and after the Shanghai ramp-up, can be estimated to total 170,000 ETH ($323 million) to be sold.<\/span><\/span><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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    Conclusion<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    With the completion of the Shanghai upgrade, Ether did not bring a large number of pledge redemptions as expected, and the market price did not plummet. Of course, in addition to the gradual unlocking mechanism of Ether, the market's expectation of the value of Ether is also the reason for this state of affairs.<\/span><\/span><\/p>

    Currently, Ether saves more than 99.9% of energy, and as Ether has officially entered the deflationary era, coupled with its booming ecosystem, the potential of Ether is really worth looking forward to in the long run.<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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