The Shanghai Upgrade on the Ethereum blockchain is on the cusp of being rolled out on April 12th. This major update is set to bring multiple notable improvements to users, most notably being the ability to withdraw staked ETH (stETH) via the Beacon Chain. This major upgrade has been highly anticipated by many users who have long looked forward to taking advantage of the liquidity made available.

The Beacon Chain has been a major focus of the Ethereum ecosystem since it went live back in December 2020 and allowed users to become validators with a staking of 32 ETH. Since then, around 10% of the entire ETH in circulation has been locked in the consensus layer deposit contract. Now, though, Shapella will solve this problem by providing users with the chance to withdraw their ETH as soon as it is released.

A lot of speculation has been made on how the Shanghai Upgrade will affect the cryptocurrency market. Open interest and prices of ETH have increased since the start of April, though it has been Bitcoin that has made the biggest headlines. On April 10th, BTC open interest rose faster than ETH and it hit the highest values since June 2022.

The market's reaction to the upcoming event will ultimately come down to whether users will be looking to withdraw their staked currency or pour more into the staking system. Many experts think that the withdrawal of funds will be higher than new deposits initially, however, a more attractive staking opportunity with lower risks will make the process more attractive in the future.

As is always the case with such major upgrades, the newly released tokens such as liquid staking tokens, which are used for DeFi applications such as lending, borrowing and trading coins, can be expected to be very volatile. The price of such tokens has already been increasing steadily, however, their value is likely to be affected by ETH around the time of the upgrade.



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