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SHANGHAI UPGRADE'S EFFECT ON ETHEREUM

Updated: Jun 8, 2023


SHORT-TERM PRICE ACTIONS

LONG-TERM IMPACT ON ETHEREUM STACK

BREAKDOWN OF 5 EIPs




EIP- 4895 Beacon Chain Push Withdrawals might cause slight turbulence in the Ethereum community as stakers will finally get their hands on the ETH rewards and deposits. Long-term stakers might use this opportunity to realise their gains(rewards). This sudden increase in supply can cause the price to decrease from the current highs. The estimated total time taken for the entire active validator set for withdrawal is approximately 4.4 days. This 5-day period will be extremely volatile for Ether as stakers might look to exit by selling their ether. This sudden surge in sell pressure will definitely hammer down ether's price indefinitely. However, this impact is only for the short term as the rest of the EIPs enhance the Ethereum network. Moreover, the upcoming hard forks post-Shanghai will take Ethereum to a new level. Nevertheless, the future looks bright for Ethereum.




ETHEREUM ON-CHAIN DATA:




From the On-Chain data above, nearly 13% of the entire Ether supply is ready to be unlocked when Shanghai Hardfork is executed.


Ether price at 8:57 pm 12 February = 1525.44 USD

Circulating supply based on Coinmarketcap: 122,373,866 ETH

Potential sell pressure: 25,426,291,719.4 USD

25 BILLION USD



Summary of the 5 EIP's in Shanghai Hard Fork



- Deprecates self-destruct opcode &

Warns developers against the use of it.











- Reduce contract code size

- Saves gas










- Enables withdrawals for Beacon Chain Stakers.

- One-time signature to change withdrawal credentials from

0X00 → 0X01

- Duration of withdrawals

27 HOURS ≈ 4.4 DAYS












- Puts a cap on initcode size and applies 2 gas to every 32-byte chunk of initcode.


- Max length = 2 * max code length

- Max length = 2* 24576 byte










- Makes accessing coinbase cheaper

- Saves gas

Cold access - 2600 gas

Warm access - 100 gas

Saves 2500 gas for each coinbase access







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Ragu Raman
Ragu Raman
Jun 30, 2023
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