Shapella Shapella
Oh, Ethereum, when you upgrade like that
You make a developer go mad
So be wise (sí) and read on (sí)
Learning about Shapella hard fork
Merge recap
It has now been over 200 days since the September 2022 transition of Ethereum to a Proof-of-Stake (PoS) consensus mechanism. In the time since, the network has already seen some remarkable changes. Most notably regarding the amount of ETH in existence.
(Source: Ultra Sound Money)
According to Ultra Sound Money, if Ethereum had remained a PoW blockchain, the ETH supply would have increased by over 2 million Ether since last September. But thanks to the Merge, which enabled the transition to PoS, the ETH supply has instead decreased and continues on a deflationary trajectory. In other words, more ETH is being burned than issued, resulting in a net decrease of over 80,000 ETH so far.
Some say it’s nothing, others say it’s ultrasound money…
So what’s next?
Shapella (Shanghai & Capella)
Let’s rewind to December 2020, when the Beacon Chain was shipped and provided a test bed for Ethereums transition to PoS. Validators eagerly staked their ETH for the first time, but they faced a problem: they couldn’t withdraw their staked ETH.
The Shapella upgrade is set to change that. This upgrade will allow validators and stakers to withdraw their assets from the Beacon Chain back to the execution layer, and it's divided into two parts: the Shanghai upgrade on the consensus layer and the Capella upgrade on the execution layer. Together, they form the "Shapella" upgrade.
Ethereum’s core developers have confirmed that this will take place on 12th April. There is also a narrative brewing that this is a bearish event, as it would potentially introduce sell pressure to the market, as staked ETH now becomes withdrawable.
Despite this narrative, ETH has seen a rather modest 40% increase in value over the past month as Shapella approaches. Could this be a "buy the rumour, sell the news" event? Only time will tell.
$ETH flirting with $1900 as Shapella approaches
Meme of the week:
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