Also referred to as Shapella, the upgrade has introduced a new feature that allows users to withdraw their staked ether and accrued rewards. With the successful upgrade, Ethereum is now positioned to grow and become an even larger player in the cryptocurrency market. Ethereum representatives cited by coinpedia.org emphasised that the hardest parts of the protocol’s transition are over, which means that the network will now focus on scaling and making transactions cheaper and faster.
According to cryptopotato.com, the name Shapella comes from Shanghai, which is the city-host of the Devcon 2 conference, and Capella, which is the brightest star in the northern constellation of Auriga. As for the newly introduced withdrawals, there will be two types of them, namely full and partial.
Full withdrawals allow validators to exit their stake completely, taking their entire balance of ETH, including the original 32 ETH, as well as any rewards they may have accrued. Partial withdrawals will only allow validators to access the excess (balances over the 32 ETH) needed to run a validator node. Within every single block that’s added to the network, 16 validators will be able to make partial withdrawals.
The upgrade also includes a series of proposed improvements that aim to reduce gas fees during periods of very high activity and network congestion. EIP-3651 aims to lower the gas costs that are associated with the maximal Extractable Value payments when accessing the COINBASE address, while EIP-3855 is designed to introduce a new instruction that pushes the constant value 0 onto the stack.
In September 2022, Ethereum executed The Merge and transitioned from a PoW (proof-of-work) consensus mechanism to a PoS (proof-of-stake) one. The Merge involved the joining of the original execution layer of Ethereum, also called the Mainnet, with its new proof-of-stake consensus layer, the Beacon Chain.
The process eliminated the need for energy-intensive mining and instead allowed the network to be secured using staked ETH. The move is a first step in realising the Ethereum vision, as the creators see it, bringing more scalability, security, and sustainability.
The main advantage of PoS is that miners no longer have to invest in powerful hardware, which generally requires a high energy output. According to Catherine Mulligan, a professor of computer science at the University of Lisbon’s Instituto Superior Técnico as cited by Business Insider, PoS was developed ‘in response to the high computational costs of proof of work protocols’.
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