Ethereum is set to undergo its Shanghai upgrade on April 12, marking the second most significant milestone in Ethereum’s developmental journey post the Merge. The upgrade is a hard fork that includes a series of improvements in the Ethereum blockchain, including the proposed Ethereum Improvement Proposals (EIPs) Shanghai and Capella. These EIPs address scalability issues, transaction fees, and token withdrawal-related developments on the blockchain. The upgrade reduces gas fees for Ethereum network developers and tackles full and partial withdrawals for the network’s validators. Ethereum holders and users don’t need to take any additional steps if they use an exchange, digital or hardware wallet unless specified by wallet providers.
If stakers or node operators fail to participate in the upgrade, Ethereum clients that fail to update to the latest versions will sync to pre-fork blockchain once the upgrade is complete. This implies that the operator will be stuck on an incompatible chain and unable to operate on the post-Shanghai blockchain network. Therefore, it is essential that operators participate in the upgrade.
The Ethereum community is optimistic about a spike in Ethereum staking within the next three months. A recent survey conducted by OKX exchange showed that 83% of ETH community members/ respondents expressed optimism about this. Experts believe the ETH token unlock could result in temporary selling pressure on the altcoin, but a large percentage of staked ETH may hit liquid staking projects or line up for staking elsewhere given the price of the altcoin and holders being underwater at the time of unlock.
On Crypto Twitter, Ethereum believers, a group referred to as “ETH Maxis,” analysts and developers have presented different scenarios for ETH post the hard fork. It is likely that the ETH upgrade is priced in, and the token unlock turns out to be a non-event or has less of a bearish impact than anticipated previously by the community.
