Ethereum (ETH)has witnessed some important developments throughout the year 2022. The Merge or Merge update completed in September has been successfully completed. With the said ‘hard fork’, the proof-of-stake (PoS) consensus model was at the core of the Ethereum blockchain. Blockchain, on the other hand, is preparing for an update called Shanghai. So what will this update cover and will it have a significant impact on the ecosystem? Here are all the details.
What is Ethereum Shanghai Hard Fork?
Ethereum Shanghai hard forkWe would like to state that the project will be completed in 2023. Investors are already getting excited for this update. With Shanghai, a liquidity will come to the ETH network. This is because crypto assets staked on the Beacon Chain will now be free and traded.
Indeed, this version also includes EIP 4895, which will make the ETH network more scalable. Network efficiency will increase at this stage of the hard fork. There will be a stage called ‘fragmentation’ in order for the transfer fees to decrease.
The Ethereum Virtual Machine (EVM) will not be left out of Shanghai. Altcoins Its developers have accepted five proposals so far. They will be responsible for making the execution of smart contracts more secure.
On October 18, an important step was taken for the hard fork. As a result, the TestNet version, Shandong, was released.
Will Hard Fork Affect ETH Price?
Only time will tell if the hard fork will find a response to the Ethereum price. The release of the tokens will raise the possibility that it could trigger a selling pressure. However, the result is likely to be in the opposite direction of what is expected.
Consequently, with attractive rewards for staking ETH, the choice to leave the altcoin locked can be made to aid in network validation and still generate passive income.
On the other hand, Ethereum has a much stronger ecosystem compared to other altcoins and is one of the leading names in the crypto world. That’s why the current stakers are people who really trust the ecosystem.
As a result, updates to the network generally have a positive effect. Ethereum Merge also proved this situation. Thus Koinfinans.com As we reported, although the price did not increase as much as expected, the reason for this was much more complex.
On the other hand, although the suggestions are good, there is a possibility that not all of them will be seen in the hard fork. The developers’ approval indicates that they will only be in the testing phase. Hence, a correction in ETH capitalization could be seen if Shanghai offers less than the market expects.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.