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Following the successful Shanghai (Shapella) upgrade, Ethereum developers are moving to the next stage. The coming milestone Cancun-Deneb is part of Etherem’s sharding roadmap and is focused on one of the most anticipated network issues – Ethereum’s gas fee.
During the latest bi-weekly call, all-core devs highlighted that the key focus was now EIP-4844, or proto-danksharding, a feature essential to the network’s rollup-centric roadmap. Proto-danksharding introduces a new transaction type to reduce user transaction costs on layer-2 rollups.
A New Level of Ethereum
Proto-darksharding, also known as the Surge, targets a minimum of 100,000 transactions per second or more. This upgrade to EIP-4844 (Danksharding) is said to make layer-2 more efficient by reducing costs and scaling.
Thereby, the upgrade will boost the speed of the network higher. It is expected to take place in 2023.
Cancun also aims to deactivate the SELFDESTRUCT opcode to make way for statelessness. The EIP-1153 proposal, which proposes new, cost-effective ways to temporarily store data in Ethereum smart contracts, was previously excluded from Shapella but is now being considered.
The Ethereum Virtual Machine (EVM) Object Format (EOF), originally part of Shanghai, was also discussed but was deemed a poor match for the Cancun plan. However, it was agreed that EOF should be the focus of the next major upgrade, called Prague.
Despite all the hype surrounding Shanghai, the upgrade will not necessarily affect the network’s performance. Shanghai expectedly had a significant impact on those with ETH staked on Ethereum.
Undoubtedly, after the aforementioned update, a first wave of withdrawals was observed. Remarkably, on the following day, there were already 44,150 withdrawals made. It is worth mentioning, though, that most of these transactions are aimed at reclaiming the accrued rewards.
Subsequently, around April 20, a second wave of withdrawals occurred, resulting in over 100,000 ETH being withdrawn. These withdrawals were regarded as “major” by Nansen since they impacted the amount of ETH required to operate a validating node.
Lastly, between April 24 and 25, a third wave of withdrawals was identified, resulting in 240,000 ETH being withdrawn. However, during this period, approximately 80,000 ETH were also deposited.
Despite the withdrawals, new ETH continued to be deposited into staking, and as a result, more than 18 million ETH are still deposited in staking on Ethereum.
More Ether Staked
According to the latest data, unlocking staked ETH encourages more individuals to participate in Ethereum staking. Shanghai has stimulated institutional staking on Ethereum, resulting in significant inflows of ETH for institutional staking providers.
The total amount of ETH over the last month reached 224,000 ETH, deposited by staking service providers, including Bitcoin Suisse, Figment, Kiln, Staked.us, and Stakefishs. Institutional investors are also drawn to the attractive rewards of staking Ether while speculating on higher prices in the future.
Lido has shown remarkable growth since its inception. In February, the protocol recorded a deposit of 150,000 ETH in a single day. It has nearly 5.9 million ETH deposited in staking, making it the king of staking on Ethereum.
However, Lido has not yet updated its protocol to support withdrawals, and the opening of withdrawals is expected to be a significant event for Ethereum staking.
Experts in the cryptocurrency industry have expressed divergent views about the upgrade’s potential impact on Ether’s price.
But Ethereum hasn’t seen any significant price movements since Shanghai was implemented. The second largest cryptocurrency trades at approximately $1,914, almost the same level as before the upgrade.
While some analysts anticipate that the increased supply could result in a selling frenzy, others believe it might become a psychological battle where market whales punish traders for overselling. However, it remains to be seen how the upgrade will affect the price of Ether in the coming weeks.
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