LIVE BLOG: Ethereum's Shanghai Upgrade

CoinDesk reporters and editors chronicle the first-ever activation of withdrawals from the Ethereum staking mechanism, set for Wednesday at 6:27 p.m. ET (22:27 UTC). We've got the play-by-play on Shanghai – also known as "Shapella" – from what we're seeing on the blockchain and at the watch parties.

AccessTimeIconApr 12, 2023 at 3:42 p.m. UTC
Updated Apr 13, 2023 at 5:45 p.m. UTC
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(Timestamps in ET.)

7:31 p.m. ET (BK, MN & SDY): The watch parties are over, and all indicators are that the blockchain is processing withdrawals as expected. We’re ending this live blog here. Thanks for tuning in!

7:18 p.m. (BK): Checking back in on that Metrika dashboard. You can see the withdrawals in this screenshot here in the bar on the right:

(Metrika)
(Metrika)

7:05 p.m. (SDY): The Ethereum Cat Herders watch party just ended. Here's what that looked like:

(screenshot)
(screenshot)

7:03 p.m. (BK): We just moved a story on what the market's doing. (Not too much tbh but ... it's not down.)

7:01 p.m. (MN): Our main story on the upgrade is live here on the CoinDesk website:

6:59 p.m. (SDY): Roughly a half-hour after the Shanghai upgrade was activated, some 285 withdrawals in epoch 194,408 had been processed, for about 5,413 ETH ($10 million worth), according to beaconcha.in.

6:46 p.m. (MN): Epoch 194,048 has finalized, completing the Shanghai upgrade.

6:37 p.m. (MN): The ether (ETH) price is trading slightly higher after Shanghai, up about 1.4% in past 24 hours, though basically unchanged from where it was right before the upgrade happened.

6:32 p.m. (MN): Got the historic screenshot from beaconcha.in at Epoch 194,048:

(beaconcha.in)
(beaconcha.in)

6:30 p.m. (BK): Epoch 194,048 reached. Shanghai upgrade has started.

6:25 p.m. (BK): Less than two minutes to go. Last epoch before upgrade. Happens at 194,048. Monitoring here.

6:16 p.m. (BK): Ethereum co-founder Vitalik Buterin is speaking at the Ethereum Cat Herders watch party. "We're in a stage where like the hardest and kind of fastest parts of the Ethereum protocols transition are basically over and like very significant things still need to be done, but those very significant things can be safely done at a at a slower pace." Currently 2,651 viewers are tuned into this:

(Ethereum cat herders watch party)
(Ethereum cat herders watch party)

6:01 p.m. (MN): The EthStaker x Ethereum Cat Herders livestream has started. Tim Beiko, the protocol support lead for the Ethereum Foundation, is zooming in from Montenegro at an in-person gathering, and running us through what EIPs are included in the Shapella Upgrade. Watch the livestream here.

5:48 p.m. (BK): On the Nethermind YouTube live stream chat, Gorchu posted another data dashboard, this one on Parsec. One chart shows "ETH Staking Flows," with deposits in blue and withdrawals in magenta. Currently only blue bars, no pink:

(Parsec)
(Parsec)

5:42 p.m. (BK): Just benchmarking a bit. The ETH price is currently around $1,933, up 1.2% over the past 24 hours. Ether hasn't crossed $2,000 since August 2022, for what it's worth.

5:31 p.m. (BK): Basat Gorchu, a decentralized finance (DeFi) research analyst at Nethermind, just said on their watch party that he's monitoring this metrics dashboard on Metrika. It shows that 43% of validators have set their addresses to a 0x01 credential, which is needed to enable withdrawals.

5:27 p.m. (MN): Barnabus Busa and Parithosh Jayanthi, DevOps engineers at the Ethereum Foundation, are among those on the Nethermind watch party. Ahmet Ramazan, a Cryptography Researcher at Nethermind, is talking about “signature aggregation.” It is all quite sedate at the moment.

5:04 p.m. (MN): After some streaming difficulties, Nethermind's YouTube Shapella watch party has started, and Ethereum developers are reflecting on the testing and tooling that has gone into tonight's upgrade. If you're curious about what other watch parties are happening later, check out our watch parties guide here.

3:42 p.m. (MN): It’s getting silly out there. Hudson Jameson, an Ethereum ecosystem veteran who now works on governance at Polygon, just posted this.

3:33 p.m. (MN): Robert Ellison, chief growth officer at Allnodes, a cryptocurrency hosting and staking platform, just emailed with this:

“There is simply no reason or sentiment to rush and withdrawal ETH as most stakers are positive about the long-term viability of Ethereum and view it as a long term commitment. After all, they locked their ETH into place without even knowing when Shanghai was going to be released… Currently the amount of validators waiting to be activated outpaces the exit queue. Any short-term volatility will be very short and mainly due to commitments by institutions like Kraken who have to unwind their Staking services due to regulatory concerns. Even in cases like Kraken, those stakers will simply move to other services like Allnodes or Rocketpool.”
Allnodes


3:06 p.m. (BK): Nicola White, CEO of the crypto liquidity provider B2C2, just told me during a Zoom interview that she expects Ethereum transactions to slow down for a while as the Shanghai upgrade goes live, because many traders and users will be waiting to make sure everything goes smoothly. "Most people will pause settlements," she said. "You'll see the blockchain slow down quite a bit as people make sure everything's working."

2:50 p.m. (BK): On CoinDesk TV's "First Mover" program Wednesday, RockX CEO Zhuling Chen said he thinks Shanghai will prove to be a "game changer" as staking becomes more prevalent, providing a boost to blockchain-based money markets. "If you think about it, this is the first time that Ethereum has a long-term, market-risk-free yield curve that can actually go for a long run," Zhuling said. CoinDesk's Fran Velasquez has the story, and the full video of the interview is below.

2:44 p.m. (SDY): Just out with this story based on data from the blockchain-analysis firm Nansen: Only a Tiny Amount of ETH Is Poised to Be Withdrawn After Ethereum Shanghai Upgrade, Nansen Says. In the run-up to the significant event, very little ETH appears ready to be withdrawn. Nansen data shows that nearly 4,000 validators have already unstaked 141,499 ETH (worth about $270 million) that's waiting to be withdrawn. This represents less than 1% of Ethereum's total validators and staked ETH each.

1:59 p.m. (BK): The website wenmerge.com has this countdown widget. Queue the Prince.

(wenmerge.com)
(wenmerge.com)

1:24 p.m. (BK): ZkSync Era, the zero-knowledge rollup on Ethereum that went live a couple weeks ago with a big splash (h/t to Margaux for that scoop), released an update on its operational plans for later in the day when Shanghai goes live. Probably a lot of teams are doing stuff like this.

1:13 p.m. (BK): CoinDesk's Daniel Kuhn just published this: Everything You Need to Know About Ethereum's Big Upgrade. He highlighted a piece out earlier in the day by our Shaurya Malwa citing the blockchain-analysis firm Glassnode with the estimate that some $300 million of ether might be sold after the Shanghai upgrade. It might sound like a lot, but according to the Glassnode report, that amount of selling pressure could be absorbed quickly: “Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume. Therefore, we conclude that even the most extreme case will have an acceptable impact on the price of ETH.”

1:10 p.m. (BK): Bank of America analysts noted in a report last week that Shapella "acts as a precursor for future upgrades, providing a small step forward,” as reported earlier Wednesday by CoinDesk contributor Will Canny. "Ethereum’s 'long-term viability' is dependent on the execution of its development roadmap, the report said. This includes the implementation of a sharding approach called Danksharding, which aims to reduce the costs of transactions originating on scaling solutions and cut the processing and storage requirements for validators," Canny wrote. Note that the dank-sounding "danksharding" and the perhaps even danker-sounding "proto-danksharding" were featured in Margaux's piece out Tuesday on what comes next after Shanghai.

1:04 p.m. (BK): QCP Capital not sounding so bullish in its Telegram broadcast just out:

We fail to see what the bullish case can be for this event as those at the front of the queue are likely to sell spot, while those further back will be hedging via perps/futures if they have not already done so. The market has already seen bearish price action in anticipation of this event, with ETH underperforming BTC in recent weeks. ETH/BTC has broken through the key support level of 0.658, and can potentially head back to 0.0553 (See chart), as continued and sustained spot selling pressure in thin markets for days after Shapella leads to further bearish price action on ETH. This can also potentially drag down the broader market.
QCP Capital Broacast
Technical analysis levels of ETH/BTC ratio. (QCP Capital)
Technical analysis levels of ETH/BTC ratio. (QCP Capital)

12:37 p.m. (MN): Ethereum developers' comments continue to roll in showcasing their faith in tonight's Shapella upgrade. "I’m feeling confident that our rigorous testing will be fruitful this evening, and looking forward to a smooth Shapella activation. I’m curious to see how the withdrawal/deposit queues will play out in a few months of time,” said Barnabas Busa, a DevOps engineer at the Ethereum Foundation, to me via DM on Discord.

12:20 p.m. (MN): RockX CEO Zhuling Chen told CoinDesk TV's "First Mover" this morning that the Shapella upgrade will be a game changer. "From the dapps or application layer, we're expecting a lot of innovative financial products, and also, different types of new products."

12:10 p.m. (MN): Nansen, a leading blockchain data provider, has released its Shanghai Upgrade dashboard so eager folks can track ETH deposits and withdrawals once Shapella is live. The Withdrawal Queue list is already starting to pick up!

Nansen's Shanghai Upgrade dashboard (Nansen)
Nansen's Shanghai Upgrade dashboard (Nansen)

12:01 p.m. (MN): CoinDesk caught up with Ethereum DevOps engineer Parithosh Jayanthi, who was in charge of much of the testing for Shapella. "I'm feeling quite good about Shapella, it somehow feels very different than the adrenaline fuelled rush before the Merge," Jayanthi told CoinDesk via DM on Discord. "We made some last minute checks that we've updated all of our nodes and now I'm looking forward to the watch parties to start!"

11:30 a.m. (BK): ICYMI here's a link to our roundup of all the Shanghai watch parties planned for Wednesday night, and a bunch of other great web tools that people can use to monitor the action on the blockchain – compiled by Ethereum beat reporter extraordinaire Margaux Nijkerk and blockchain-data-master Sage D. Young: Ethereum’s Shanghai Upgrade: Here’s Our Guide to Watch Parties, Blockchain Tools.

11:26 a.m. (BK): Galaxy Digital's Christine Kim put together a cool primer on what to watch for. She tweeted this out April 6 but we were just having a look and she does a really good job of breaking down some of the technical stuff. A teaser: "The major code change in Shapella is EIP 4895, which adds a new system-level operation to support validator withdrawals. The addition of withdrawal functionality to the Ethereum codebase represents the final step in completing the network’s multi-year transition to a proof-of-stake (PoS) consensus protocol."

11:17 a.m. (BK): One of the biggest unknowns about the Shanghai upgrade is how the price of ether (ETH) will trade through it all. CoinDesk reporter Lyllah Ledesma has a story out showing just how spilt crypto market analysts are in their predictions. "Some observers expect an ether price swoon after the upgrade as users liquidate their holdings, while others believe the expected uptick in the selling pressure is already baked in and the market will bounce after the event in a classic 'buy the news' move," Ledesma wrote.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Bradley Keoun

Bradley Keoun is the managing editor of CoinDesk's Tech & Protocols team. He owns less than $1,000 each of several cryptocurrencies.

Margaux Nijkerk

Margaux Nijkerk reports on the Ethereum protocol and L2s. A graduate of Johns Hopkins and Emory universities, she has a masters in International Affairs & Economics. She holds a small amount of ETH and other altcoins.

Sage D. Young

Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.


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