Staked ETH Withdrawing is Coming, Deadline Set for March 2023 with Shanghai Upgrade

ethereum, unsplash

Ethereum transitioned to the proof-of-stake (PoS) consensus mechanism from the proof-of-work (PoW) consensus mechanism on Sept. 15. 

The update, referred to as “The Merge,” marked one of the landmark events in the history of cryptocurrencies, as it helped bring down the network’s energy consumption by over 99%

However, it marks only the first milestone in Ethereum’s ultimate goal to reach 100K transactions per second (TPS).

On Thursday, Ethereum’s core developers revealed in a meeting that they had set a tentative deadline of March 2023 for the network’s next upgrade – the Shanghai hard fork. 

After the Merge, users could stake their ETH to be eligible to verify transactions. In return, they will get yields directly proportional to the staked quantity. There was only one issue: you couldn’t get back your staked ETH. 

The Shanghai update’s objective is to fix this by enabling ETH withdrawals. According to DuneAnalytics data, around 15 million ETH, translating to around $19 million and more than 10% of crypto’s total circulation, is currently locked on the Ethereum Beacon Chain. 

Withdrawing may be delayed

Even though the plan is to roll out the upgrade by March next year, the developers cautioned that the inclusion of any other update along with Shanghai could possibly delay the process. 

One such feature is the EVM Object Format (EOF). The Ethereum Virtual Machine (EVM), which enables the smart contracts environment, has been due for an upgrade for the past two years. It had been avoided until now to make way for the Merge upgrade. 

Further delaying the upgrade wouldn’t be ideal, and the developers have made it their second priority after the stake withdrawal. 

Another upgrade that has been long anticipated is Ethereum Improvement Protocol (EIP) 4844, or proto-danksharding. 

It’s a version of roll-up mechanism that would significantly enhance the efficiency of the network by offloading transaction verifications to the layer-2s from the mainnet, which would then only sample small pieces of data. 

The developers hope to finalize the EIP 4844 upgrade by May or June 2023.

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