The Ethereum developer community has begun preparations for the next major update following the transition to Proof-of-Stake.
Ethereum blockchain developers have launched the Shandong testnet, the first step toward the Shanghai update. The upgrade preparations are expected to last until September 2023. The work plan is outlined on the project’s GitHub. This will be the first major upgrade after Ethereum’s successful transition to Proof-of-Stake.
One of the highlights of the update will be the unlocking of sETH — ETH tokens sent to staking. There will also be the option to directly withdraw ETH staking rewards. Other significant changes that users will experience include lower online transaction fees. Layer 2 protocols such as Polygon will be affected as well, increasing the efficiency of horizontal scaling.
For developers whose products run on Ethereum, the most tangible change will be the Ethereum Virtual Machine (EVM). This modification is included in EIP-3540 and will allow code and data to be separated, making it much easier to make changes to the functionality of existing protocols and simplifying interoperability between different projects in the Ethereum ecosystem.
Ethereum’s successes attract increased attention to the project from market participants and industry colleagues. For example, Ripple announced the launch of the XRP Ledger sidechain compatible with the Ethereum Virtual Machine for 2023. Even representatives of the public sector are interested in the project’s reputation. For instance, Norges Bank works on a CBDC project using Ethereum as its technology backbone.
