{"id":546596,"date":"2023-02-02T02:25:47","date_gmt":"2023-02-01T23:25:47","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/"},"modified":"2023-02-02T02:25:47","modified_gmt":"2023-02-01T23:25:47","slug":"ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/","title":{"rendered":"# Ethereum&#8217;s Shanghai fork is coming \u2014 but it doesn&#8217;t mean investors should dump ETH"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2d21cf11acb\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2d21cf11acb\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#%E2%80%9D_Ethereums_Shanghai_fork_is_coming_%E2%80%94_but_it_doesnt_mean_investors_should_dump_ETH_%E2%80%9C\" >&#8221; Ethereum&#8217;s Shanghai fork is coming \u2014 but it doesn&#8217;t mean investors should dump ETH &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#Ethereum_will_remain_the_leading_PoS_network\" >Ethereum will remain the leading PoS network<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#Staking_yield_remains_strong\" >Staking yield remains strong<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#Liquidity_attracts_stakers\" >Liquidity attracts stakers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#The_rise_of_liquid_staking\" >The rise of liquid staking<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereums-shanghai-fork-is-coming-but-it-doesnt-mean-investors-should-dump-eth\/#Improvement_proposals_and_their_impact\" >Improvement proposals and their impact<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Ethereums_Shanghai_fork_is_coming_%E2%80%94_but_it_doesnt_mean_investors_should_dump_ETH_%E2%80%9C\"><\/span>&#8221; Ethereum&#8217;s Shanghai fork is coming \u2014 but it doesn&#8217;t mean investors should dump ETH &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-5a4050f8>Ethereum\u2019s next big upgrade, Shanghai, is on the horizon for March. The Shanghai hard fork will implement further improvement proposals for the Ethereum network as well as enable Ether (ETH) stakers and validators to withdraw their assets from the Beacon Chain.<\/p>\n<p>At the time of writing, staked ETH <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/beaconcha.in\/charts\/staked_ether\">represents<\/a> <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roximately 14% of the total supply, or 16 million coins. It equates to over $25 billion at ETH\u2019s current price, a substantial sum that will gradually become liquid following the fork.<\/p>\n<p>Some ETH stakers have waited over three years to withdraw their rewards. Does that mean most of them will line up to withdraw and sell their ETH as quickly as possible? This scenario is improbable. There are numerous reasons why investors shouldn\u2019t be concerned about the impending update, and even more why most Ethereum stakeholders will increase their investment into staking following Shanghai.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Ethereum_will_remain_the_leading_PoS_network\"><\/span>Ethereum will remain the leading PoS network<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Although ETH is the second-largest cryptocurrency by market cap, Ethereum is the leading proof-of-stake (PoS) network. At the time of writing, it accounts for approximately 65% of the total value locked in decentralized finance (DeFi) protocols, sitting at around $48.7 billion.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-02\/4ce5c0af-ffd2-4aa8-a552-5351b314cde4.jpg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\">Total value locked on all blockchains.\u00a0<em>Source: DeFi Llama<\/em><\/figcaption><\/figure>\n<p>Despite the current market, the amount of ETH deposited over time has continued to increase at a steady, stable rate, reaching over 500,000 validators in January 2023.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Staking_yield_remains_strong\"><\/span>Staking yield remains strong<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The staking yield remains stable and currently sits at about 5.45% annual percentage rate (APR). Therefore, new entrants should familiarize themselves with the overall yield compensation structure consisting of staking rewards, tips and maximal extractable value (MEV).<\/p>\n<p>With MEV-Boost, stakers can increase their rewards 2x\u20133.5x over vanilla blocks. However, when demand for ETH is on the rise, it is tips and MEV that ultimately improve ETH staking yields. Since moving to proof-of-stake, MEV relayers have relayed approximately 85,000 ETH and facilitated an increase of 32,500 ETH in additional rewards.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Liquidity_attracts_stakers\"><\/span>Liquidity attracts stakers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As with any market, liquidity is king. Most investors were originally reluctant to stake ETH when it became available because doing so required locking up their funds for an undetermined period of time. Staking ETH required a minimum of 32 ETH, meaning that when Eth2 launched in December 2020, the price of entry was around $19,000. At its peak in November 2021, the price was nearly $150,000.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Post-Merge ETH has become obsolete<\/em><\/strong><\/p>\n<p>That cost to stake gave validators pause, and many held off on securing the network. The Shanghai update, however, will remove this uncertainty, and tokenholders will be allowed to withdraw their staked assets. The obvious reaction is to assume that people will simply withdraw their funds and \u201ccash out,\u201d but we are likely going to see the exact opposite. Because such a large percentage of investors were initially reluctant to stake ETH \u2014 remember, only 14% of the supply is currently staked \u2014 the percentage of ETH staked is likely going to rise with the risk of withdrawal uncertainty gone.<\/p>\n<p>Additionally, many ETH stakers bought the token during the bull run when prices hit a top of $4,500. But with the current price hovering around $1,600, it is unlikely that current stakers will sell at a loss. With MEV-boosted rewards sitting close to 7% and a positive outlook on a market price increase due to deflationary tokenomics, we expect to see a significant inflow into ETH staking. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_rise_of_liquid_staking\"><\/span>The rise of liquid staking<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Stakers can stake ETH directly with Ethereum, which requires a hefty sum of 32 ETH, or via liquid staking protocols such as Lido and Rocket Pool. Liquid staking is a concept that democratizes Ethereum staking for investors who can stake as little as 0.01 ETH. Staking small amounts of Ether is possible when investors exchange their ETH for derivative tokens, which are backed one-to-one and represent the amount of Ether staked in the pool.<\/p>\n<p>The capital efficiency of liquid staking is one of its main advantages for investors. Sometimes referred to as liquid staking derivatives (LSD), it gives you the freedom to enter and exit the market at will. Because it\u2019s a derivative, it gives investors access to additional markets, and the LSD industry is just beginning to get off the ground.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Improvement_proposals_and_their_impact\"><\/span>Improvement proposals and their impact<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The upcoming Shanghai upgrade (EIP-4895) will focus on enabling withdrawals on the execution layer \u2014 Shanghai \u2014 and the consensus layer, referred to as the Capella upgrade. The Capella upgrade is especially beneficial for ETH stakers interested in understanding how withdrawals will work, as interactions are necessary to complete a full withdrawal on the consensus layer.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Tax on income you never earned? It\u2019s possible after Ethereum\u2019s Merge<\/em><\/strong><\/p>\n<p>Ethereum\u2019s roadmap has several updates coming after Shanghai \u2014 sometimes referred to as the \u201cSurge,\u201d \u201cVerge,\u201d \u201cPurge\u201d and \u201cSplurge\u201d \u2014 demonstrating the community\u2019s dedication and long-term vision, which is essential for the protocol\u2019s future evolution. In the im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te future, EIP-4844 (proto-danksharding) can scale Ethereum with new transaction roll-ups reducing gas fees, and EIP-3540 will aim to reduce the Ethereum Virtual Machine\u2019s resource requirements.<\/p>\n<p>In 2022, Ethereum saw a 178% increase in developer activity for programming libraries, reaching 1.5 million downloads. Despite the market being down, developers have ramped up real-world solutions and continue to build smart contracts on Ethereum at a blistering pace, hitting 4.6 million deployments for Q4 2022.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-02\/cbf69a44-c9d3-446f-9a8d-01846cb186ec.jpg\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Ethereum mainnet smart contracts deployed per quarter. Source: Dune<\/em><\/figcaption><\/figure>\n<p>The success of switching Ethereum from proof-of-work to proof-of-stake should not be understated as an incredible achievement. Now that this move has been a resounding success, upgrades will be released faster, thanks to a community that is unmatched in terms of creativity, values and long-term vision. The foundation of cryptocurrency and proof-of-stake has been built on Ethereum, and it has a highly promising future.<\/p>\n<p>Investors and stakers would be wise to keep their ETH staked, allowing it to continue to secure and decentralize the network. And generating some additional passive income from staking rewards doesn\u2019t hurt the decision to remain, either.<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Konstantin Boyko-Romanovsky<\/strong> is the CEO of Allnodes. He holds a master\u2019s degree in architecture from Moscow Architectural Institute and spent more than a decade in the video <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a> industry, with a focus on Russia and Eurasian markets.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/ethereum-s-shanghai-fork-is-coming-but-it-doesn-t-mean-investors-should-dump-eth\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Ethereum&#8217;s Shanghai fork is coming \u2014 but it doesn&#8217;t mean investors should dump ETH &#8220; Ethereum\u2019s next big upgrade, Shanghai, is on the horizon for March. The Shanghai hard fork will implement further improvement proposals for the Ethereum network as well as enable Ether (ETH) stakers and validators to withdraw their assets from the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":546597,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/547c99e1-9b3b-4b34-88b1-baab18c5c8a3.JPG","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,74891,75326,74938,74876,133582,81175,71407],"class_list":["post-546596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-ethereum","tag-ethereum-2-0","tag-ethereum-price","tag-proof-of-stake","tag-staking","tag-shanghai","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/546596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=546596"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/546596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/546597"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=546596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=546596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=546596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}