Ethereum validators will soon be able to unstake their Ether (ETH) from the proof-of-stake (PoS) Beacon Chain after the Ethereum Foundation announced on Tuesday that the highly anticipated ‘Shapella’ hard fork upgrade will take place on the Ethereum main net on April 12, 2023.
According to a blog post by the Foundation on March 28, Ethereum core developers reached a consensus to go ahead with the upgrade at epoch 194,048 on April 12 at 22:27:35 UTC, confirming previous reports estimating the potential date and time of the hard fork’s execution.
Ethereum’s Shapella Hard Fork Scheduled for April 12, 2023
Epoch is the time taken by Ethereum to complete 30,000 blocks on the chain. The length of each epoch is determined by the speed at which transactions are processed and validated.
After Ethereum transitioned to a proof-of-stake blockchain, it began processing transactions at a faster rate, leading to the Beacon Chain introducing slots, which are opportunities for new blocks to be created on the main net. Now each epoch equates to 32 blocks, or 6.4 minutes because new blocks can be validated every 12 seconds.
The foundation decided on the epoch, slot, and time for the upgrade after a week-long discussion between members. The discussions were led by Ethereum core developer Tim Beiko.
Shapella Will Finally Allow the Unstacking of Ether
Shapella is a combination of Ethereum’s ‘Shanghai’ consensus layer and ‘Capella execution layer. The upgrade will take place simultaneously on both protocols. Shapella will allow Ethereum holders to finally withdraw staked Ether for the first time.
The withdrawals will be enabled by Ethereum Improvement Proposal EIP-4895, which will push staked ETH from the Beacon Chain to the Ethereum Virtual Machine (EVM), commonly known as the execution layer.
The most significant hard fork since the ‘Merge’ in September 2022 will better optimize the network’s costly gas fees for certain on-chain activities.
The Ethereum Foundation also noted that non-staking nodes will have to update their client software to be prepared for the hard fork, while ETH stakes will have to update both the Beacon node and validator client. Other users need not take any action unless recommended by their wallet providers.
With the popularity of Ethereum in the crypto space, it was not surprising that several crypto platforms started notifying users of how they will be handling the Shapella upgrade.
Coinbase, the second largest cryptocurrency exchange by trading volume, announced last week that it will make ETH unstacking feature available to users 24 hours after the upgrade takes effect. The platform also assured users that they need not unstake their tokens beforehand because Coinbase will secure the assets during the hard fork.
Meanwhile, Kraken has asked its U.S.-based customers to unstake their ETH due to the exchange getting into trouble with the Securities and Exchange Commission (SEC) related to its crypto staking service.
In January, the company was charged with violating securities law and had to pay a $30 million fine and promised not to offer any staking-as-a-service products to customers in the United States.
The main goal of the Shapella upgrade is to enable unstacking on Ethereum which was previously not possible or carried some level of liquidity risk to do so. Currently, only about 14% or 17.81 million Ether is staked on the Beacon Chain, compared to about 70% of ADA and SOL tokens staked on rival blockchains Cardano and Solana.
If everything goes to plan, Shapella will lead to a massive increase in the amount of ETH that will be staked directly on-chain instead of token holders having to go through liquid staking protocols like Lido and RocketPool.
On March 14, the Ethereum Foundation reported that a Shapella test run on the Goerli testnet went smoothly even though there was a delay in activation time due to many validators failing to update their client software. However, such issues are not expected to happen when Shapella goes live as validators have been offered incentives to upgrade their clients to the latest versions.
Ethereum Upgrades Over the Years
Before Shapella, ‘Paris’ – The Merge – was the most significant hard fork in Ethereum history, because it changed the blockchain’s consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS).
Before that was the ‘London’ upgrade in August 2021, which according to EIP-1559 introduced a base fee that users must pay before they received a block reward and a tip, at which point the base fee was burned. London was intended to make Ether a deflationary asset over time.
Then there was the ‘Berlin’ upgrade in April 2021 which optimized gas fees for some activities on the Ethereum Virtual Machine (EVM), and ‘Istanbul’ in December 2019 which served to improve denial-of-service attack resilience and make Ethereum-based Layer 2 scaling solutions more powerful and efficient.
The Ethereum Foundation also announced that the Shapella bug bounty program will run until April 5, doubling rewards for any bugs found in the Shapella code. Successful bounties are eligible to receive anywhere between $2,000 and $500,000, depending on how critical the bug is to the Ethereum main net.
At the time of writing, ETH is trading at $1,797 – down 1.3% in the last 24 hours.