Decoding Ethereum Shapella Upgrade - Shanghai, Capella, and Engine Updates

Sonic Team

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Date of publishing : Mar 20, 2023 , 10:00 AM

The long-awaited "Shapella" update will go live on the Ethereum mainnet on April 12th, according to Ethereum's core devs' blog post on GitHub. Shapella is a combination of two separate upgrades— Capella and Shanghai. This is one of the major updates after the Merge happened last year in September. In this blog post, we'll dig deep into what is Shapella upgrade and what other updates are coming with this.

What is Shapella Update?

Shapella is a blend of the Ethereum Shanghai and Capella hard forks. As a result, Shapella will make many improvements, including the implementation of staked ETH withdrawals.

The Beacon Chain, a proof-of-stake (PoS) blockchain, went live on December 1st, 2020. To get started, 16,384 deposits of 32 staked ETH were needed. Following the Merge, when the Beacon Chain (also known as the consensus layer) and the original Ethereum blockchain (also known as the execution layer) merged to become the current PoS Ethereum blockchain, staking became the sole means of producing, verifying, and securing blocks on the network.

What are the Ethereum Shanghai update and Chapella update?

The Shanghai update will enable the following EIPs (Ethereum Improvement Proposals) to the execution layer (the mainnet): 3651, 3855, 3860, 4895, and 6049. Yet, EIPs 3651 and 4895 are the most relevant.

The Ethereum Shanghai Upgrade is the largest update to Ethereum after The Merge. You will be able to unstake ETH and withdraw ETH rewards from the Beacon Chain for the first time.

The upgrade is a hard fork. It implements EIP-4895, which hardcodes Ethereum's new unstaking policy. Validators have been allowed to stake ETH since the Beacon Chain was launched in December 2020.

Withdrawals are enabled with the update, although only six validators per epoch can perform a complete withdrawal. For Ethereum, one epoch is 6.4 minutes, implying that 1,350 validators can withdraw every day.

EIP 3651 will deploy the 'Warm COINBASE' address. Builders on Ethereum (those who bundle transactions into blocks) regularly use this address to obtain new tokens and communicate with the program.

EIP-3855: The "Push0" code reduces gas prices for developers.
EIP-3860: Limits developers' gas expenses while interacting with 'initcode' (a code used by developers for smart contracts).
EIP-6049: Notifies developers of "SELFDESTRUCT," a gas fee reduction code that is being phased out.

In addition, the Capella update adds "automated account sweeping capabilities." As a result, all validator accounts will be examined regularly to see whether there are any available incentives or complete withdrawals to be paid. Some accessible prizes will be paid automatically, however, complete withdrawals will require user intervention.

Future of Ethereum after Shapella update

Ethereum has always prioritized network scalability. And The Merge opened the path for Ethereum to deploy blockchain sharding to further grow the network. This update will enable cheaper rollups, enable layer2 solutions, secure data storage requirement distribution, and streamline node operations. There is a long way to go for Ethereum. However, there will be some ups and downs in the price but the future is bright, and with the coming update lot of doors open for insitutuiaonal staking and LSD which will benefit the end users.