The highly anticipated ethereum Shanghai upgrade is scheduled to go live today, April 12, following a quick consensus reached during the 157th AllCoreDevs execution layer meeting.
What are the execution changes that Shanghai brings?
This move comes after a smooth transition of the Goerli testnet and aligns with the Ethereum Foundation blog post on March 28 that provides some details. The Shanghai update follows the transition to proof of stake. It brings new functionality to the execution and consensus layers of the ethereum (ETH) blockchain, while allowing validators to withdraw their stake from the Beacon Chain back to the execution layer.
The update includes changes to the Execution Layer (Shanghai), Consensus Layer (Capella), and the Engine Application Programming Interface. Key changes to the execution layer include EIP-3651 (hot COINBASE), EIP-3855 (PUSH0 instruction), EIP-3860 (limit and meter start code), EIP-4895 (beacon chain push withdrawals as operations) and EIP-6049 (disapprove SELF DESTRUCTION).
warm coin base
EIP-3651, Warm COINBASE, optimizes gas costs for direct COINBASE payments on Ethereum by initializing the COINBASE address as warm at the beginning of transaction execution. This encourages the use of ETH as the primary payment method and maintains compatibility without introducing security issues.
In the context of ethereum and other blockchain networks, “coinbase” refers to the address that receives the block reward and transaction fees due to mining or validating new blocks. Essentially, the coinbase address is the destination where newly minted cryptocurrencies are sent and the fees charged to compensate miners or validators for their work in maintaining the network and confirming transactions.
PUSH0 Instruction (EIP-3855)
EIP-3855 introduces the PUSH0 instruction, which pushes the constant value 0 onto the stack, optimizing gas usage and reducing the size of the contract code. This proposal is intended to decrease the risk of contracts misusing multiple instructions for optimization and to reduce the need for DUP instructions to duplicate zeros.
Limit and Meter Initiation Code (EIP-3860)
EIP-3860 proposes a maximum size limit for the startup code and applies an additional gas cost for each 32-byte chunk on Ethereum. This ensures fair charging, minimizes risk, and simplifies EVM engines with explicit limits.
Beacon Chain Push Removals (EIP-4895)
EIP-4895 introduces a system-level “operation” for beacon chain validator withdrawals to the EVM. This “push” based approach processes withdrawals in the execution layer as they are removed from the consensus layer. By creating a separate operation type, EIP-4895 simplifies testing and security. There are no associated gas costs for the withdrawal type, as the consensus layer imposes a maximum number of withdrawals to keep operational costs negligible.
Self Destruct Deprecation (EIP-6049)
EIP-6049 aims to deprecate the SELFDESTRUCT opcode in ethereum by discouraging its use and warning developers about possible future changes. The proposal suggests updating the documentation to inform developers about the probability of a breaking change, without the need to make modifications to the Ethereum clients.
a cappella improvement
The Capella update introduces full and partial withdrawals for validators, BLS_TO_EXECUTION_CHANGE messages, and state and block independent historical accumulators. More information about Capella can be found in the v1.3.0-rc.5 spec.
ETH unlock staked
With these updates, more than 18 million staked ETH will be unlocked, allowing users to withdraw their staked ETH for the first time. Although there are concerns that this could lead to a sell-off event, numerous experts express confidence that long-term holders will continue to bet on recent CNBC and crypto YouTubers. EllioTrades and virtual bacon he thinks long-term believers will keep gambling.
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The Shanghai upgrade is expected to increase confidence among stakeholders and increase the share rate from 15% to at least 40% of the total supply. Liquid participation platforms such as Lido Finance (LDO) are expected to benefit from this development.
Overall, the crypto community remains optimistic about the future of ethereum and the potential impact of the Shanghai upgrade on market share and dynamics.
Still, it remains to be seen how the market will react when the next phase of fear arrives and Ethereum cannot count on the stabilizing presence of over 18 million ETH that cannot be sold or moved. At press time, this equates to approximately $33.7 billion of equity in the participation contract.
