Aug 16, 2023 1 min read

Executive Summary: Ethereum's Shanghai Upgrade — Everything You Need To Know

In this article, I explain the upcoming Ethereum Shanghai upgrade that will enable unstaking and withdrawal of staked ETH, analyzing the impact on Ethereum as a network, ETH price, validators, liquid staking providers, and what comes next in Ethereum's roadmap.

Summary: The upcoming Ethereum Shanghai upgrade will enable withdrawals of staked ETH, making Ethereum a full proof-of-stake chain, while having a limited impact on ETH price due to controlled outflows.

What is the Shanghai upgrade:

Hard fork upgrade to enable unstaking and withdrawing staked ETH
Makes Ethereum a true PoS chain after The Merge

How Shanghai works:

Implements unstaking policy via EIP-4895
6 validators can fully withdraw per epoch, partial withdrawals also enabled

Impact on Ethereum:

Decreases tech risk, expected to boost staking ratio
Makes Ethereum more decentralized and secure

Impact on ETH price:

Most staked ETH currently underwater
But controlled outflows limit selling pressure

Impact on validators:

Can withdraw staked ETH and accrued rewards
Enables exiting from staking if desired

Impact on liquid staking:

Still relevant for small stakers and DeFi uses
Expected to grow in popularity after upgrade

Timeline:

Targeted for March 2023
Successful testnet dress rehearsal done

What's next:

Sharding aimed at boosting throughput

Full article: