What’s New with Shanghai Update?

Ethereum developers on Thursday decided to evaluate eight Ethereum Improvement Proposals (EIPs) for inclusion in the network’s upcoming hard fork called “Shanghai”.

The hard fork upgrade will unlock staked ETH withdrawals on the Beacon Chain and include other proposals designed to improve the Ethereum Virtual Machine, addressing scalability issues. However, there is no consensus yet on when this will happen.

The phrase “evaluation for inclusion” (CFI) of EIPs means that developers will commit to improving these offerings and testing them on devnets. However, there is no guarantee that all these proposals will be finalized for inclusion in Shanghai. Before holding this meeting, the main developers had decided that withdrawals from the Beacon Chain, EIP 4895, would definitely be part of the fork. This means that when Ethereum goes through its next upgrade, users who deposit Ethereum by locking it to the Beacon Chain smart contract before Merge will be able to access them, along with additional accrued rewards.

While the developers have agreed on which EIPs to focus on by Shanghai, they have not set a timeframe for the mainnet deployment of the hard fork. The Ethereum Foundation gave a flexible timeline for unlocking staked ETH 6-12 months after Merge, but earlier last week the language on the subject started to change. At the end of this meeting, the timeline for Shanghai was not clear. Some developers want to speed up Shanghai and include only ETH pull EIP along with a few smaller EIPs in March 2023. Then, the next fork will include another major scaling upgrade, proto-danksharding, and will be released sometime in the fall of 2023.

Other developers want a larger and more comprehensive Shanghai upgrade that includes both major upgrades in the future. For now, EIP 4844, also known as proto-danksharding, is included in the CFI package. EIP 4844 is an important first step that the protocol will take towards making the network more scalable through sharding, a method that “shards” the network as a way to increase its capacity and lower gas costs.

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