Since the Ethereum network moved to Proof of Stake last September, the release of ETH deposited in staking has become one of the priorities of blockchain developers. Therefore, the upcoming rollout of the Shanghai Update on the Sepolia testnet should make it possible to confirm the arrival of this functionality in the coming months.
The Shanghai update is particularly awaited by the community since it should allow Ethereum to continue to evolve. Indeed, the abandonment of Proof of Work was only the first step of a long road ahead for blockchain.
As a reminder, since the launch of the beacon chain in 2020, users are able to deposit ETH in staking on the network Ethereum. Nevertheless, it is not possible for the moment to recover the ETH deposited in staking. The Shanghai update aims to allow stakers to finally be able to collect their ETH.
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The Shanghai update will be launched on the Sepolia testnet
As is required before each major update, Ethereum developers will deploy this update to several testnet before testing it from the mainnet. The reason for these intermediate steps is simply to check for bugs in order to ensure the security of the network, but also the assets users.
At the beginning of February, the update has already been rolled out to the Zhejiang testnet. Despite some minor errors discovered and then corrected by the developers, its deployment was rather successful.
Thus, the success of the first testnet encouraged the developers to accelerate the launch of the Shanghai update on the Sepolia testnet. So, from next February 28the Sepolia testnet, historical testnet of the network Ethereum, will be upgraded to actively test it. If all goes well, a final dress rehearsal should take place on the Goerli testnet.
If the next few weeks of testing go without a hitch, the Ethereum devs hope to be able to roll out the Shanghai update to the mainnet. from next March.
Lido is actively preparing for the Shanghai update on Ethereum
Theoretically, participation in staking is subject to the obligation to operate a validator node on the network. However, in order to become a validating node, it is necessary to bring into play 32 ETH. This amount is not accessible to everyone and the technical skills to launch a validator node are just as difficult to obtain.
To overcome this problem, Lido was launched to facilitate access to Ethereum staking. Concretely, Lido allows everyone to stack ETHwithout necessarily having reached the required amount of 32 ETH, and to secure the network while earning the rewards for participation.
As a liquid staking solution, Lido has set up a system of wrapped Ethereum. Therefore, for a deposit of 10 ETH to stake, the user will receive 10 stETH.
Lido represents 4.9 million ETH in staking, i.e. nearly 30% of all ETH deposited in staking on Ethereum. Since then, the management of this future update by Lido is particularly followed by the community.
Lido publishes an explanatory thread of the sequence of events
Many users are eagerly awaiting the possibility of being able to recover their staking ETH. Since then, a global update of the Lido protocol will be implemented in the coming weeks to prepare for this eventuality.
Thus, stETH holders will have the opportunity to withdraw from Lido the amount of their choice at a ratio of 1:1. This process will happen according to the following procedure :
- Locking your stETH following your withdrawal request
- A NFT you will be distributed representing your place in the withdrawal queue
- Lido will procure the number of ETH corresponding to your request and then lock them while burning the corresponding number of stETH
- When your withdrawal request is finalized, you can recover your ETH by burning your NFT
Lido prepares for two scenarios when updating the network.
By default, turbo mode will be activated and will allow users to have their withdrawal request fulfilled within 2-7 days.
Conversely, if the protocol experiences too much demand putting the security of the assets at risk, then Lido will switch to Bunker mode. In this case, withdrawal requests may take much longer.
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