Ethereum has proposed to implement the Shanghai hard fork after the completion of the Merge upgrade (transition from the proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS) consensus mechanism) on the network. The Shanghai upgrade is expected to implement a change that unlocks validator withdrawals of staked ETH in securing the network as its major change among other upgrades.
In Ethereum’s transition from the proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism, network validators were expected to stake 32ETH to be eligible in the block validation process while accruing network rewards for validating transactions. However, since the completion of the Merge, validators have not been able to access their staked ETH. The Shanghai hard fork through EIP-4895 designed to primarily focus on ensuring that network validators are able to access or withdraw their ETH (both staked and accrued ETH). The hard fork also introduces other improvements related to gas fees.
The Shanghai hard fork is expected to occur when the Beacon chain epoch reaches 194048 estimated to take place on April 12, 2023, 10:27 pm UTC / April 13, 2023, 2:27am GST (epoch 1681338455).
Announcement | Ethereum Shanghai Hard Fork
Evaluation Process
MidChains has:
Evaluated what is changing?
Analysed the impact of the changes.
What is Changing?
EIP-4895: Beacon chain push withdrawals as operations - This EIP proposes a new method to support validator withdrawals to be pushed from the Beacon chain onto the Ethereum Virtual Machine (EVM) via a new “system-level” operation type. The architecture is “push”-based, rather than “pull”-based, where withdrawals are required to be processed in the execution layer as soon as they are dequeued from the consensus layer. This EIP suggests a new type of object – the “withdrawal operation” as it has special semantics different from other existing types of EVM transactions.
EIP-3651: Warm COINBASE – This EIP proposes to allow block builders and validators access the COINBASE address (which is a software used by validators and block builders), at a lower gas cost. The COINBASE address shall be warm at the start of transaction execution, in accordance with the actual cost of reading that account. At the start of transaction execution, “accessed_addresses” shall be initialized to also include the address returned by COINBASE. This is expected to improve Maximal Extractable Value (MEV) payments by correcting a previous oversight on the cost to access the COINBASE address and gives some added benefits to users and developers that open-up new use cases.
EIP-3855: PUSH0 instruction – introduces a code dubbed “PUSH0” (“0x5f”) instruction, that will reduce gas costs for developers by pushing the constant value 0 onto the stack. The “base” gas cost is used for instructions that places constant values onto the stack, such as ADDRESS, and ORIGIN, among others.
EIP-3860: Limit and meter initcode – introduces a cap on the gas cost for developers when interacting with “initcode” (a code used by developers for smart contracts). This is an extension of the EIP-170 by introducing a maximum size limit for “initcode” - (MAX_INITCODE_SIZE = 2 * MAX_CODE_SIZE = 49152). The EIP-3860 further introduces a charge of “2” gas for every 32-byte chunk of “initcode” to represent the cost of jumpdest-analysis. Lastly, the size limit results in the nice-to-have property that EVM code size, code offset (PC), and jump offset fits a 16-bit value.
EIP-6049: Deprecate SELFDESTRUCT – proposes to deprecate the SELFDESTRUCT opcode and warns against its use as it has a potential future behavior change. The EIP-6049 is only a deprecation warning. Client teams expect SELFDESTRUCT semantics to change in future network upgrades, but the opcode's behavior remains unchanged in Shanghai.
Execution Specification – execution-specs/shanghai.md at master · ethereum/execution-specs · GitHub
Impact Analysis
MidChains will support the Ethereum Shanghai Hard Fork. Deposits and withdrawals for Ethereum and all ERC20 standard tokens (LINK, MATIC, USDC, ZRX, AAVE, BNT, BAT, COMP, CRV, CHZ, MANA, ENJ) shall be temporarily halted during the upgrade period as a precautionary measure. No action is required by clients who hold Ethereum and ERC20 standard tokens. Clients’ funds will not be impacted by this upgrade. All deposits and withdrawals made after the upgrade are expected to be processed without any impact.
Impact on Client Funds: No impact to clients' funds post network upgrade.
Regulatory implications: None.
Maturity / Market Capitalization: None.
Security and Operations: Enhanced security, and improved efficiency.
Traceability / Monitoring: None
Exchange Connectivity and Demand: No impact.
Type of Distributed Ledger Technology (DLT): No impact.
Innovation and Efficiency: lower gas fees and improved efficiency.
Upgrade Preparation
No action is required by clients who hold the following virtual assets; ETH, LINK, MATIC, USDC, ZRX, AAVE, BNT, BAT, COMP, CRV, CHZ, MANA, ENJ.
MidChains will temporarily halt deposits and withdrawals of Ethereum and all ERC20 standard tokens (LINK, MATIC, USDC, ZRX, AAVE, BNT, BAT, COMP, CRV, CHZ, MANA, ENJ) during the upgrade. Clients will be notified prior to the Ethereum Shanghai Hard Fork via the platform, as well as email notifications of the halt and resumption of deposit and withdrawal of Ethereum and all ERC20 standard tokens. Clients will be advised not to initiate any withdrawals for Ethereum and all ERC20 standard tokens during and immediately after the upgrade. Trading activities will remain uninterrupted for ETHUSD, LINKUSD, MATICUSD, USDCUSD, ZRXUSD, AAVEUSD, BNTUSD, BATUSD, COMPUSD, CRVUSD, CHZUSD, MANAUSD, and ENJUSD pairs.