Ethereum Shanghai hard fork pushed to mid-April
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(Kitco News) - The highly-anticipated Shanghai hard fork on the Ethereum (ETH) network, which is designed to enable the withdrawal of staked Ether on the Beacon Chain, has been pushed back approximately two weeks by the developers for the protocol.
The upgrade was originally scheduled to happen in late March, but at an Ethereum developer meeting on Thursday, the core developers working on Shanghai came to the consensus that the hard fork would need to be delayed until after it was launched on the Goerli testnet, which is scheduled to take place on March 14.
The Shanghai Capella upgrade on Goerli, also known as Shapella, will serve as the dress rehearsal for the Shanghai launch on mainnet, so the developers wanted to ensure that they had enough time to make sure the upgrade was functioning smoothly in order to avoid any issues with the mainnet launch.
“For mainnet, we usually want to give people at least two weeks after the announcement,” said Ethereum core developer and project coordinator Tim Beiko. “So imagine Goerli happens on the 14th, everything goes well, on the 16th, we agree to move forward with mainnet – I think the earliest that puts us is like the first week of April.”
A tweet from Beiko providing a rundown of the developer meeting noted that the developers “didn't agree to a mainnet date explicitly, but assuming things go well on Goerli, we'd probably set a date on the next ACDE (Mar 16).”
Once the Shanghai hard fork is incorporated into the mainnet, a phased withdrawal of Ether staked on the Beacon Chain will begin.
The core devs have designed the system so that withdrawals will be dynamic and dependent on the number of validators that are exiting at the time. A two-stage process will be required, including an exit queue and a withdrawal period, so the process will happen gradually.
Data provided by Beaconcha.in shows that there are currently 17.17 million Ether staked on the network, or a little more than 14% of the total ETH supply, currently valued at $26.8 billion.
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Some in the crypto ecosystem have voiced concerns about the effect that the ability to withdraw staked tokens will have on the price of Ether, suggesting that it has the potential to lead to a price dump as some investors who have had their tokens locked up for more than two years may sell them on the open market en masse.
But multiple analysts have pushed back against this narrative, calling it FUD (fear, uncertainty and doubt) and highlighting that the phase release mechanism will help to combat this.
An in-depth dive into the numbers was provided by Twitter user Westie, a researcher at Blockworks, who posted a lengthy thread outlining their determination that, “while this is certainly a large selling event, I think it can be fairly quickly absorbed by the market.”
23/ For context, roughy $6B-10B of ETH is exchanged on any given day across both CEXs and DEXs, and 2.1M extra ETH was emitted under PoW every 6 months.— Westie ?? (@WestieCapital) March 1, 2023
Therefore, while this is certainly a large selling event, I think it can be fairly quickly absorbed by the market.