- Shanghai’s Ethereum network upgrade, starting in March, will allow users to withdraw Ether (ETH) from the network.
- The Shanghai Upgrade public test network is expected to be released by the end of February.
- The Shanghai upgrade has sparked excitement among some people due to potential conflicts between Liquid Staking Derivatives (LSDs) after the upgrade.
- The LDO token associated with the Lido DAO has recently shown a strong performance with a 71% gain over the past week.
The Shanghai upgrade of the Ethereum network focuses on allowing users to withdraw Ether (ETH) from the network. Scheduled to begin in March, this upgrade will allow users to access staked coins on the network as part of the move to Proof of Stake consensus in September.
To meet the March deadline, the developer plans to release a public test network for the Shanghai upgrade by the end of February. During a recent core developer conference call, it was decided not to consider adding the Ethereum Virtual Machine Object Format (EOF) to the upgrade as it could delay the rollout. Shanghai’s upgrade priority is to ensure a smooth implementation of the withdrawal feature.
The Shanghai upgrade of the Ethereum network, scheduled for March 2023, has sparked excitement in anticipation of competition among LSDs (Liquid Staking Derivatives).
There are some potential consequences to expect after the upgrade.
potential selling pressure: Potential for increased selling pressure from large investors and investors looking to sell assets.
Stakers do not unstake: Another possibility is that the staker’s behavior has not changed and they may continue as normal.
Staker moves unstaked ETH to LSD: Another anticipated possibility is that investors will migrate newly de-staking Ethereum to Liquid Staking Derivatives (LSD) to benefit from higher returns and decentralized financial capabilities. am. This could bring new innovations and developments in this area.
What is liquid staking?
Liquid staking, also known as “soft staking,” is a method of earning rewards by locking funds while maintaining access to them. This is in contrast to traditional staking on the Beacon Chain, which requires a hefty investment of 32 ETH (approximately $40,000) and funds cannot be withdrawn until the end of the staking period. With Liquid Staking, you can bet any amount and withdraw your funds at any time.
Liquid staking providers are expected to see an increase in revenue once staked ETH becomes available for withdrawal. Liquid staking derivatives enable participation in decentralized finance without sacrificing staking yield. Examples of this include stETH staking that yields yields and his Lido offering his LDO tokens, although it requires his 10% cut in staking rewards. Rocket Pool is another well-known provider that emphasizes decentralization and offers competitive returns. Other notable providers in this space include Stakewise and Frax Finance, both growing rapidly. Stader Labs also plans to launch a liquid staking derivative on Ethereum in the first quarter of this year, with other companies likely to follow suit.
The LDO token associated with the Lido DAO has performed strongly recently, with a 71% gain in value over the past week, according to CoinGecko.