What is Shanghai Upgrade


The Ethereum Shanghai Upgrade is the next major upgrade to the Ethereum network after the Merge took place on September 15, 2022. The Shanghai Upgrade will implement a set of highly-anticipated modifications, such as EIP-4895, which allows users to withdraw staked ETH.

If you want to know more about Ethereum, please refer to the content: What is Ethereum

The Ethereum developer community estimates completing the Shanghai Upgrade during the second half of 2023, but there has yet to be a consensus on a precise schedule. As the first step, the Ethereum Foundation launched a testnet called Shandong for the Shanghai Upgrade on October 17, 2022.

Ethereum developers are still discussing which EIPs will be included in the Shanghai Upgrade. As of November 15, 2022, four EIPs are confirmed to be included in the Shanghai Upgrade, while three EIPs are under consideration. The Ethereum Foundation shares the most up-to-date list here.

What is EIP? What's its utility? Please refer to the content: What is EIP

Confirmed EIPs

EIP-3651 reduces gas fees for builders responsible for packaging Ethereum transactions into blocks, e.g., Flashbots, and benefits other network participants who pay for builders' services.

EIP-3855 is an optimization that reduces smart contract code size and saves developers gas fees.

EIP-3860 doubles the size limit of a smart contract so that developers can squeeze in more functionalities. However, EIP-3860 will slightly increase the cost of smart contract deployment.

EIP-4895 allows users to withdraw staked ETH and earnings, and the process will be gas-free.

Potential EIPs

EIP-1153 introduces a gas-efficient solution to intra-contract communication.

EIP-3540 separates smart contract code and data. This separation is especially beneficial for on-chain code validators, improving ease of use and saving significant gas.

EIP-3670 relies on EIP-3540 and complements it by introducing code validation at contract creation, which will reject contracts that contain incomplete data or undefined instructions.

Other EIPs

EIPs related to roll-ups are currently not included in the Shanghai Upgrade, including the buzzing EIP-4488 and EIP-4844.

Both EIP-4488 and EIP-4844 are short-term optimizations for roll-ups. Although data sharding remains the long-term solution to Ethereum's scalability problem, it requires considerable time before deployment. EIP-4488 and EIP-4844 provide temporary solutions to cut roll-up costs and incentivize an ecosystem-wide transition to a rollup-centric Ethereum.

These EIPs and others could be added to the Shanghai Upgrade because the list is still being determined. Until then, the most noticeable change enabled by the Shanghai Upgrade will be the withdrawal of staked ETH.

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