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Yesterday, Thursday was the last Ethereum All Core Devs meeting of the year. The main topic was the upcoming hard fork called Shanghai.

Until now, it was unclear which Ethereum Improvement Proposals (EIPs) would be included in the upgrade.

Most notably, there was controversy in the last meeting about whether proto-danksharding (EIP-4844) would be included to improve the scalability of Layer 2 rollups.

However, as Tim Beiko of the Ethereum Foundation reportsthe consensus is now reached.

EIP-4844 is not expected until Fall 2023 with a separate hard fork, which means the Shanghai upgrade will not be delayed and may remain on the tentative March 2023 schedule.

Ethereum will enable staking withdrawals for the first time

In September 2022, Ethereum switched its consensus mechanism to proof-of-stake with the merger. Investors had already been able to stake ETH on the Ethereum blockchain since November 2020, with the publication of the ETH deposit contract.

However, there is a problem. Participants were not previously able to withdraw their staked ETH unless they used a liquid staking method. With the Shanghai hard fork, that changes.

As stated by Beiko, Ethereum core developers have decided to prioritize activating stake withdrawals rather than implementing the so-called “Surge” upgrade with EIP-4884. The proposal will allow the withdrawal of staked ETH for the first time.

So even though EIP-4844 will not be included, three other techniques EIP which are of primary interest to developers are already sure to be incorporated into the Shanghai upgrade.

These are EIP-3651 (Warm COINBASE), EIP-3855 (PUSH0 instruction), and EIP-3860 (Counter limit and initialization code).

The most interesting of these is EIP-3651: Warm Coinbase. The name should not be confused with the American exchange of the same name. Rather, it is gas savings for direct COINBASE payments.

These are growing in popularity because they allow conditional payments, which provide benefits such as implicit cancellation of transactions that can be undone.

However, access to COINBASE is too expensive. The address is initially cold under the access list introduced in EIP-2929. This imbalance in gas costs may create incentives for alternative payments besides ETH.

EIP-3651 solves this problem with a hot COINBASE and thus reduces gas costs when developers interact with it.

Impact on the price of ETH

The impact on the price of ETH could be huge when investors can access their ETH for the first time in over two years. Although not all bettors want to sell their ETH, the volume of the deposit contract is huge.

The total value of the ETH 2.0 deposit contract hit an all-time high of 15,569,431 ETH just yesterday.

This means that around 12.7% of the total ETH supply is in the contract and will likely be available for the first time in March.

Glassnode Ethereum Deposit Agreement
Total ETH value in ETH 2.0 deposit contract. Source: Glassnode Alerts

Meanwhile, Ether again failed to break through the major resistance at $1,300 yesterday. At press time, ETH was trading at $1,279 and is therefore just below the key level.

Ethereum ETHUSD 2022-12-09
ETH price, 4-hour chart. Source: TradingView





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