What Is the Ethereum Shapella Upgrade?-banner-imageAcademy

What Is the Ethereum Shapella Upgrade?

The countdown to the Ethereum Shapella Upgrade is coming to an end. The name "Shapella" is a combination of "Shanghai" and "Capella", the name of two different upgrades. After several postponements, Ethereum core developers decided to trigger the Shapella Upgrade on April 12.

The Shapella Upgrade, a combination of the Shanghai and Capella Forks, is one of the most anticipated developments in the cryptocurrency industry. With the Shapella Upgrade, investors who invested Ether to become validators on the Beacon Chain in 2020 will be able to withdraw the Ether they staked. As of today, there are approximately 18 million staked ETH on the Ethereum network.

The Shapella Upgrade, which is expected to take place on April 12 at 6:27 p.m. EDT, will enable the withdrawal of staked ETH and rewards during the transition from PoW to PoS. The amount of ETH staked is equal to about 15% of the total supply, meaning that $30M worth of ETH will be available for withdrawal. However, there will be a daily limit for ETH withdrawals. The withdrawal process can be spread over at least two months. The Ethereum developer team has said that the withdrawal of rewards will be prioritized. The Shapella Upgrade is expected to take place at epoch 194,048.

What Is Shapella?

Shapella is a combination of the Shanghai and Capella Forks, which are execution and consensus layer forks, respectively.

Is There a Difference Between Shapella and Shanghai?

Upgrades to the execution layer are named after the cities where Devcon took place, while upgrades to the consensus layers are named after the stars. “Shapella” is a combination of Capella, the brightest star in the northern constellation Auriga, and Shanghai, where Devcon 2 was held.

Ethereum has a two-layered structure consisting of execution, and consensus layers. The execution layer is where Ethereum worked before the Merge. The consensus layer started to function in the Ethereum structure with the Beacon Chain. The new upgrade, mostly known as “Shapella” instead of "Shanghai", will take place in both layers.

What Is EIP-4895?

Ethereum worked on the Proof of Work consensus mechanism before the Merge and currently works on Proof of Stake. The EIP-4895 will allow users to withdraw their staked Ether (ETH).

Unlocking funds of investors who have staked ETH specifically to become validators is an important development for the Ethereum ecosystem. When the Proof of Stake network, the Beacon Chain, was launched in December 2020, users who wanted to be validators on the Ethereum 2.0 network locked their funds on the Ethereum network, with at least 32 ETH. Finally, investors can access the funds they staked.