THE hard fork shanghai from Ethereumalso called shapella (combination of Shanghai and Capella, the second part of the fork), was successfully completedmarking a major step in the transition from the platform to a network Proof of Stake (PoS) complete. The update allows users who have placed their ETH in staking to secure and validate transactions on the blockchain to withdraw their funds.
The upgrade of Shanghai was triggered at 12:27 a.m. and finalized around 12:42 a.m. that night, Paris time. About half an hour later, nearly 285 epoch 194,408 withdrawals had been processed, for a total of about 5,413 ETH or $10 million.
Although the unlocking of ETH in staking could worry some speculators, Ether price is in the green at the momentwith a 5% increase since the hard fork. In effect, Ethereum quickly approaching $2,000 while writing this article.
ETH in staking and rewards finally unlocked
Until the update Shanghaiusers who had placed Ethers in the new system PoS could not withdraw their funds or redeem accrued rewards, two crucial features of the new paradigm. Ethereum’s transition from the original consensus mechanism to proof of work (PoW), the same used by Bitcointo PoS has significantly reduced its power consumption by 99%, making the network more secure and enabling greater decentralization.
During a live event, Ethereum co-founder, Vitalik Buterinstated that “the hardest and fastest parts of the Ethereum protocol transition are essentially overwith scaling, or making transactions faster and cheaper, being the next major challenge for the blockchain.
The mechanism of consensus PoS introduced a new class of validators to keep the Ethereum blockchain running. Validators are required to place at least 32 ETH in a smart contract, where the funds are locked. The more ETH a validator places, the more likely they are to be entrusted with the proposal of a block of transactions data to be confirmed on the blockchain. When a block proposed by a validator is approved by other validators, it receives an additional reward.
For those who don’t have a full 32 ETH to place, providers of “liquid staking” offer an alternative, allowing users to participate in the staking process with any amount of ETH. These third-party providers stake ETH on the network and manage the validator on behalf of all of their customers.
Lidothe largest liquid staking protocol, controls approximately 23% of all ETH in staking (more than 18 million tokens). Coinbase, kraken And Binancesome of the biggest trading platforms of crypto currencies in the world, control together 22% ETH in staking.
The update Shanghai marks a key step in the transition from Ethereum towards a complete PoS network, with withdrawals of staking tokens now possible, the platform is preparing to meet new challenges, such as increasing its scalability.
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