Big update for lower gas fees and faster transactions with Shanghai upgrade

ByBhupender Singh

Oct 19, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Ethereum (ETH) spikes in price with no resistance in sight

  • The Shanghai upgrade will bring an elemental change to the Ethereum Virtual Machine (EVM).
  • The upgrade will come with EIPs that will allow validators to withdraw their staked ETH at a lower gas fee.

The Ethereum blockchain network is preparing for its most important Shanghai upgrade which will facilitate the withdrawal of staked Ether (sETH) along with lower gas fees. The Ethereum developers have already launched the testnet version dubbed Shandong.

Developers will start working on the implementation of these critical improvements. This process shall likely continue up to September 2023. Last month, the Ethereum network underwent a Merge upgrade by combining the Ethereum mainnet with the Beacon Chain.

This upgrade moved Ethereum’s consensus model from Proof-of-Work to Proof-of-Stake. Market experts call it a breakthrough achievement that will significantly improve the Ethereum blockchain’s efficiency and scalability. Besides, it makes the Ethereum blockchain a lot more environmental-friendly cutting energy consumption by 99 percent.

Now, the upcoming Shanghai upgrade will bring an elemental change to the Ethereum Virtual Machine (EVM), a software that powers smart contracts on the Ethereum blockchain. The Ethereum Improvement Proposal EIP-3540 will be the community’s most-anticipated update separating coding from data. Speaking about the proposal to CoinTelegraph, Galen Moore, content lead at Axelar, said:

From my perspective, EIP-3540 is the most significant upgrade proposed for Shanghai. It’s a further step toward interoperability within the Ethereum ecosystem. Currently, layer-2 networks on Ethereum use a cumbersome code validation process. EIP-3540 separates code and data, making that process more efficient. It’s especially good news for the growing ecosystem of Polygon Supernets — Decentralized application chains built on Polygon Edge.

Withdrawal of staked Ether (ETH)

As of now, validators with staked ETH cannot withdraw funds directly in order to ensure network stability. Ethereum Improvement Proposal EIP-4895 will allow the withdrawals of sETH and earned rewards via the Beacon Chain.

In addition to these proposals under consideration, the upgrade will bring changes to some Layer-2 protocols. The Shanghai upgrade will reduce the gas fee by equalizing block sizes and simultaneously increasing call-data efficiency in the network. Moore added:

When specialized chains can build on a layer-2 like Polygon and reduce the cost of communicating with the base chain Ethereum, that reduces gas prices for users everywhere in the ecosystem — by making it more efficient to scale horizontally in a way that spreads demand.

The Merge upgrade last month was just the beginning of major improvements coming to the Ethereum blockchain. The next improvement in the line will be the Surge. This will be an important step in improving the scalability of Ethereum’s ability to store and access data. Further developments will be the Verge, Purge, and Splurge. These will be the last three steps in the ongoing Ethereum development and shall happen over the next few years.

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