In 2022, ethereum (ETH) has become one of the most prominent topics in the cryptocurrency market due to The Merge. This update changed the altcoin consensus model from Proof of Work (PoW) to Proof of Stake (PoS). This was the first time a 100% functioning network changed its consensus model, and it was a historic episode in the blockchain industry.
This is a big step towards Ethereum 2.0, with more development planned for 2023. First on the list is the Shanghai Hard Fork. The purpose is to withdraw ETH deposited by staking on Beacon Chain, which has been locked since 2020.
The altcoin development team has set a March deadline for this update. Similar to The Merge, we need to run a testnet first to make sure the deadlines are met and Shanghai goes without a hitch.
At the first developer call of the year, they announced testing in February. Additionally, the addition from Shanghai has decided to reject Ethereum Improvement Proposals (EIP).
Developers should incorporate the EVM Object Format (EOF) to eliminate latency issues with hard forks. This proposal will improve the Ethereum Virtual Machine (EVM) programming environment and ensure everything runs smoothly in Q1 2023.
but the preparation Shanghai It didn’t start now.
It is the public test network that is published. Developer testing in a closed environment has already begun in December. By January 6, the advance had reached Block 4,000.
What are your expectations for Shanghai’s arrival?
The most anticipated factor is Ethereum’s declining decentralization in staking. This is a major concern for market-leading altcoin investors. Because since the days of beacon chains, few crypto companies have control over the amount of ETH he has in staking.
Altcoins should become less centralized as they leave these platforms. One factor that may help this is that from Q2 2023 he has more investors realizing that there is liquidity in staking ETH. With this move, more people may decide to invest in supporting the network and earning passive income with this service.
Additionally, more shared staking platforms for Ethereum are expected to emerge. Lido DAO is very successful because it allows small investors to bet crypto without having to invest his 32 ETH. However, this feature has done a major centralization of cryptocurrency staking.
Of course, this is not Lido’s fault. After all, it serves its purpose. But the blockchain market already knows how problematic it is to trust cryptocurrencies to just one player. In other words, the emergence of more platforms for staking is essential for this he Ethereum process to be more decentralized and less concentrated in one company or one cryptocurrency exchange.