Scheduled for April 13 Shanghai-Capella (Shapella) hard fork in the long term, it will lead to positive dynamics of the Ethereum exchange rate by reducing risks for investors. This was stated by experts interviewed by Cryplogger.
The upgrade is the next step in the Ethereum roadmap after The Merge and includes changes to the consensus and execution levels. Its main goal is to open access to ETH withdrawal from staking.
Validators will have access to full or partial unfreezing of stake nodes. According to Andrey Sobol from Matter Labs and ZkSync, in the current situation, huge capital is frozen in illiquid Ethereum staking, so Shapella will “open the gates of liquidity.”
Representatives of the DeFi platform Lido also call this part of the hard fork “the most significant and positive.”
“Before Shapella, the amount of Ethereum in a stake could only grow – now it can be “taken back”. On the one hand, this opens up the possibility of redistributing assets between existing and new staking products. On the other hand, significant uncertainty is removed, as staking becomes “fully functional”. This suggests that the number of services and their users will grow,” they said.
In addition, Shapella will help optimize the operation of smart contracts and commissions within the network, in particular for coinbase addressesas well as reduce the cost of creating new blocks.
“The hard fork will bring small improvements to the level EVMadding the long-awaited PUSH0 instruction and reducing the cost of access to the address of the miner’s wallet. It also prepares the network for abandoning the mechanism for deleting smart contractssince users often continue to send transactions to addresses that have lost their relevance, losing both gas and money, ”said Anton Bukov, co-founder of 1inch Network.
Allbridge.io co-founder Andrey Veliky believes that the upgrade will reduce the risks for participants in various liquid staking protocols.
“The peg of liquid staking derivatives such as stETH could deviate during periods of excessive market volatility. The possibility of withdrawals will help reduce such risks for linking the rate of derivatives,” he explained.
Experts expect an increase in demand for liquid staking products after the released ETH enters the market.
“These services are being reformatted. They will still be needed, since they can be used to put staked ethers in another protocol, ”adds Andrey Sobol.
In his opinion, Shapella, like any other hard fork, could potentially pose a threat to the security of the Ethereum network, especially given the scale of the changes, when “giant amounts of money turn from illiquid to liquid.”
On the impact of the update on the price of the second cryptocurrency in terms of capitalization, Sobol answered in two ways:
“On the one hand, the ability to unfreeze ethers and sell them can increase supply. On the other hand, fully functional PoS could fuel enthusiasm for the system as a whole and fuel the media surge and increase demand.”
Credentia CEO Stepan Gershuni recalled that validators have not been able to interact with staked Ethereum for the past two years and for many this is a chance to sell it.
“However, the developers have provided a dynamic system that will not allow you to withdraw all funds at once. Therefore, if this will affect the price of the cryptocurrency, it will be very insignificant,” he said.
Andrew the Great agrees with him:
“In the short term, there will be little pressure on the price of Ethereum because some validators will choose to withdraw their money from staking. But since withdrawal restrictions will be introduced at the protocol level, pressure on the rate will be limited. In the long term, reducing risks for investors and participants in liquid staking services is likely to lead to positive dynamics in the Ethereum price.”
The developers of Lido, who are currently working on a new version of the protocol, told Cryplogger that they would not have time to present it before the activation of Shapella.
The upgrade will include two big changes:
- the ability to change stETH back to ETH;
- modular architecture around “many validators”.
Lido emphasized that the team of contributors is focused on ensuring the security of the protocol. Now the code is being evaluated by four companies – Certora, Statemind, HEXENS and Oxorio, previously different parts of the upgrade were audited by Sigma Prime, ChainSecurity and MixBytes () Camp.
“Node operators are testing their infrastructure, which should allow Ethereum to be withdrawn from staking in a timely and secure manner. Both processes are moving quite successfully, but they take time: the upgrade of Lido Ethereum liquid staking should not be expected until May,” the project team said.
One of restrictions The proposed design of the Lido V2 is that it “should not have assumptions about future events or market conditions”. Therefore, Lido developers refused to predict how much assets users will withdraw from staking in the first weeks after the hard fork. The main task, according to them, was “to build a protocol that will work equally stable in any conditions.”
After the Shapella hard fork, the withdrawal of rewards received as part of the work of validators will be available only to addresses with the prefix 0x01, since only they can indicate the path for crediting the cryptocurrency.
“For the Lido Ethereum Liquid Staking Protocol, the initial volume of these rewards should be around 200,000 ETH, which the protocol code will use in priority to fulfill withdrawal requests. Without applications in the queue, these funds will go to staking,” the Lido team said.
RockX CEO Zhuling Chen believes that Shapella is an important step towards greater scalability and efficiency of the Ethereum network. Despite likely short-term market volatility, the ecosystem will reap significant long-term benefits through increased transaction processing speed, reduced transaction costs, and improved smart contract security.
“With the Shapella update, the liquid staking landscape will change forever and Ethereum will become the benchmark for cryptocurrency returns. We will see many innovative solutions for direct and liquid staking starting to play a much bigger role in the cryptocurrency space,” Chen said.
Read more about the Shapella update in a special Cryplogger article.
Found a mistake in the text? Select it and press CTRL+ENTER
Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!
Scheduled for April 13 Shanghai-Capella (Shapella) hard fork in the long term, it will lead to positive dynamics of the Ethereum exchange rate by reducing risks for investors. This was stated by experts interviewed by Cryplogger.
The upgrade is the next step in the Ethereum roadmap after The Merge and includes changes to the consensus and execution levels. Its main goal is to open access to ETH withdrawal from staking.
Validators will have access to full or partial unfreezing of stake nodes. According to Andrey Sobol from Matter Labs and ZkSync, in the current situation, huge capital is frozen in illiquid Ethereum staking, so Shapella will “open the gates of liquidity.”
Representatives of the DeFi platform Lido also call this part of the hard fork “the most significant and positive.”
“Before Shapella, the amount of Ethereum in a stake could only grow – now it can be “taken back”. On the one hand, this opens up the possibility of redistributing assets between existing and new staking products. On the other hand, significant uncertainty is removed, as staking becomes “fully functional”. This suggests that the number of services and their users will grow,” they said.
In addition, Shapella will help optimize the operation of smart contracts and commissions within the network, in particular for coinbase addressesas well as reduce the cost of creating new blocks.
“The hard fork will bring small improvements to the level EVMadding the long-awaited PUSH0 instruction and reducing the cost of access to the address of the miner’s wallet. It also prepares the network for abandoning the mechanism for deleting smart contractssince users often continue to send transactions to addresses that have lost their relevance, losing both gas and money, ”said Anton Bukov, co-founder of 1inch Network.
Allbridge.io co-founder Andrey Veliky believes that the upgrade will reduce the risks for participants in various liquid staking protocols.
“The peg of liquid staking derivatives such as stETH could deviate during periods of excessive market volatility. The possibility of withdrawals will help reduce such risks for linking the rate of derivatives,” he explained.
Experts expect an increase in demand for liquid staking products after the released ETH enters the market.
“These services are being reformatted. They will still be needed, since they can be used to put staked ethers in another protocol, ”adds Andrey Sobol.
In his opinion, Shapella, like any other hard fork, could potentially pose a threat to the security of the Ethereum network, especially given the scale of the changes, when “giant amounts of money turn from illiquid to liquid.”
On the impact of the update on the price of the second cryptocurrency in terms of capitalization, Sobol answered in two ways:
“On the one hand, the ability to unfreeze ethers and sell them can increase supply. On the other hand, fully functional PoS could fuel enthusiasm for the system as a whole and fuel the media surge and increase demand.”
Credentia CEO Stepan Gershuni recalled that validators have not been able to interact with staked Ethereum for the past two years and for many this is a chance to sell it.
“However, the developers have provided a dynamic system that will not allow you to withdraw all funds at once. Therefore, if this will affect the price of the cryptocurrency, it will be very insignificant,” he said.
Andrew the Great agrees with him:
“In the short term, there will be little pressure on the price of Ethereum because some validators will choose to withdraw their money from staking. But since withdrawal restrictions will be introduced at the protocol level, pressure on the rate will be limited. In the long term, reducing risks for investors and participants in liquid staking services is likely to lead to positive dynamics in the Ethereum price.”
The developers of Lido, who are currently working on a new version of the protocol, told Cryplogger that they would not have time to present it before the activation of Shapella.
The upgrade will include two big changes:
- the ability to change stETH back to ETH;
- modular architecture around “many validators”.
Lido emphasized that the team of contributors is focused on ensuring the security of the protocol. Now the code is being evaluated by four companies – Certora, Statemind, HEXENS and Oxorio, previously different parts of the upgrade were audited by Sigma Prime, ChainSecurity and MixBytes () Camp.
“Node operators are testing their infrastructure, which should allow Ethereum to be withdrawn from staking in a timely and secure manner. Both processes are moving quite successfully, but they take time: the upgrade of Lido Ethereum liquid staking should not be expected until May,” the project team said.
One of restrictions The proposed design of the Lido V2 is that it “should not have assumptions about future events or market conditions”. Therefore, Lido developers refused to predict how much assets users will withdraw from staking in the first weeks after the hard fork. The main task, according to them, was “to build a protocol that will work equally stable in any conditions.”
After the Shapella hard fork, the withdrawal of rewards received as part of the work of validators will be available only to addresses with the prefix 0x01, since only they can indicate the path for crediting the cryptocurrency.
“For the Lido Ethereum Liquid Staking Protocol, the initial volume of these rewards should be around 200,000 ETH, which the protocol code will use in priority to fulfill withdrawal requests. Without applications in the queue, these funds will go to staking,” the Lido team said.
RockX CEO Zhuling Chen believes that Shapella is an important step towards greater scalability and efficiency of the Ethereum network. Despite likely short-term market volatility, the ecosystem will reap significant long-term benefits through increased transaction processing speed, reduced transaction costs, and improved smart contract security.
“With the Shapella update, the liquid staking landscape will change forever and Ethereum will become the benchmark for cryptocurrency returns. We will see many innovative solutions for direct and liquid staking starting to play a much bigger role in the cryptocurrency space,” Chen said.
Read more about the Shapella update in a special Cryplogger article.
Found a mistake in the text? Select it and press CTRL+ENTER
Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!
