“On September 15, Ethereum successfully transitioned to the proof-of-stake (PoS) consensus mechanism. The update, widely referred to as The Merge, was one of the biggest, most-anticipated events in the cryptoverse. However, it was only the first milestone on the network’s eventual goal of achieving 100K transactions per second (TPS). The next most important update on the cards is the Shanghai upgrade” [CNBCTV18.com. Explained: Ethereum’s Shanghai update and what it will mean for users. (Accessed October 19, 2022)].
“Ethereum (ETH) core developers are now focusing their attention after The Merge on the cryptocurrency’s next upgrade, Shanghai, starting with the “Shandong” test network (testnet) launch. The Ethereum Foundation announced the news of the new upgrade on 14 October” [McQuaid, D. Ethereum Shanghai update: What you need to know about the Shandong testnet launch. (Accessed October 19, 2022)].
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The popular protocol’s Shanghai upgrade will go live sometime next year and will be its first upgrade since September’s Merge. In the meantime, the Shandong testnet will allow developers to experiment with the next phases of Ethereum’s development. This includes the proper implementation of staked Ether (ETH) withdrawals. Parithosh Jayanthi, a DevOps engineer at the Ethereum Foundation, commented on the Shandong testnet. According to him, ‘the Shandong testnet is meant to give developers a chance to try out the potential EIPs to find issues.’
[Ajiboye, T. Ethereum Officially Launches Shandong Testnet to Lay Groundwork for Upcoming Shanghai Upgrade. (Accessed October 19, 2022)].
As laid out by developer Tim Beiko, the Shanghai version addresses three critical issues surrounding Ethereum. It introduces changes in the EVM object format, Beacon Chain withdrawals, and L2 fee reduction.
To begin, the EVM object format will separate the code from the data. This could be extremely beneficial for the on-chain validators. Alongside the separation, EIP-3540 introduces a new contract code section that helps in tackling and resolving complex features such as Account Abstraction, control flow in EVM, and EIP-3074.
The Shanghai update also addresses the Beacon chain withdrawal delay. This aspect of the update will allow Ethereum holders to withdraw their deposited ETH, which previously wasn’t possible.
Lastly, the update introduces changes that will effectively lower the notorious gas prices of Ethereum. The changes will be made by equalizing the block sizes and increasing the CALL DATA functionality of the block.
[Grullon, M. Ethereum Shanghai Update: What and When is the Update?. (Accessed October 19, 2022)].
It should be noted however, that Shanghai is not as yet fully specified. “MariusVanDerWijden, a software engineer at Ethereum, posted a track of all ongoing Shandong testnet projects on github.com, which included seven EIPs” [Vismaya V. Ethereum Foundation Launches Pre-Shanghai Testnet Shandong. (Accessed October 19, 2022)]. The aforementioned track of testnet project may be viewed by clicking here.
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Many see the EIP-3540 upgrade as the most significant and as such “is one of the community’s most-anticipated updates since it separates coding from data, which could be beneficial for on-chain validators. Galen Moore, content lead at Axelar, told Cointelegraph about the proposal: 'From my perspective, EIP 3540 is the most significant upgrade proposed for Shanghai. It’s a further step toward interoperability within the Ethereum ecosystem. Currently, Layer-2 networks on Ethereum use a cumbersome code validation process. EIP 3540 separates code and data, making that process more efficient. It’s especially good news for the growing ecosystem of Polygon Supernets — dAppchains built on Polygon Edge” [Pereira, A.P. Ethereum launches testnet for Shanghai upgrade: Here’s what is next. (Accessed October 19, 2022)].
Shanghai is anticipated to launch by September 2023 at the latest, according to core developers; however, a precise date has not yet been decided upon by Ethereum’s core developers. EF JavaScript stated on the thread that the Shanghai Testnet would incorporate an EL block explorer and a transaction faucet. The faucet will enable users to fund their transaction experiments when conducting activities in the testnet. In addition, Shandong will also come with an open RPC endpoint for users who despise running their nodes. The team launched Shandong Testnet as a pure JavaScript testnet that runs on numerous lodestar and Ethereum Java Script client boot nodes. Shandong testnet will bring the Ethereum Java Script EL clientele, including the new boundaries (Lodestar) explored that are entirely responsible for the testnet setup.
[Vismaya, supra].
