The highly anticipated Shanghai hard fork of Ethereum has been delayed by approximately two weeks, according to reports. The update initially planned for the end of March is expected to be released during the first half of April.
Ethereum (ETH) Developers Announced the delay during a meeting held on 2 March. The core development team agreed to wait approximately two weeks after the Goerli testnet launch on March 14 before implementing the hard fork. The Goerli testnet will be the final testing ground for the Shanghai hard fork before it is deployed to the mainnet.
Implications of the Shanghai hard fork for ETH participants
The recent successful test on the Sepolia testnet on February 28 paved the way for the launch of the Goerli testnet. The upgrade from Shanghai Capella to Goerli is the last chance for Ethereum clients and staking providers to ensure that the hard fork runs smoothly when it goes live. This update will allow for the gradual withdrawal of Ethereum that has been staked on the Beacon Chain.
The exact timing of the Shanghai hard fork has been eagerly anticipated due to its significant financial implications. Since Ethereum began transitioning to a proof-of-stake model, users who stake ETH with the network have been accruing rewards in the form of newly generated ETH. an amazing $28 billion worth of ETH (and counting) has been deposited on Ethereum, representing about 14.5% of all ETH in circulation.
Numerous companies struggling during the ongoing crypto crisis are strongly motivated to start producing rewards on ETH staked to attract customers and generate revenue through fees. According to JP Morgan analysts, the upcoming Shanghai update could be a game changer for Coinbase as it could create a new era for the exchange. Projections from the bank suggest the stake could generate annual revenue for Coinbase ranging from $225 million to $545 million.
Currently, the largest staking entities in Ethereum are intermediary staking services like Lido and cryptocurrency exchanges like Coinbase, Kraken, and Binance. Pooling clients’ ETH for gambling and passive rewards, these companies account for a whopping 56% of all ETH wagered on the network, according to Dune Analytics.
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Core developers rush to deliver a hard fork
Major Ethereum developers are under pressure to deliver the Shanghai hard fork as quickly as possible, leading them to remove other much-needed improvements to the Ethereum network from the update and avoid adding minor technical tweaks to Ethereum’s coding methods. that could create technical debt for the network in the future.
During a developer meeting In January, core developer Micah Zoltu criticized decisions made regarding the long-term health of the Ethereum network. Zoltu expressed concern that the focus was solely on meeting public demands in the present rather than considering the future sustainability of the network. “It seems that we are not thinking about the long-term health of Ethereum,” Zoltu said.
