Ethereum’s Shanghai Upgrade, First Major One Since Merge, Is Complete: Binance

The move will give investors access to more than $30 billion (roughly Rs. 2,45,877 crore) of the digital tokens.

By Reuters | Updated: 13 April 2023 12:10 IST

Ethereum’s Shanghai Upgrade, First Major One Since Merge, Is Complete: Binance

Photo Credit: Reuters

The changes will likely lead to heightened volatility for ether, investors have predicted

Highlights

Deposits and withdrawals of tokens are back online
Ether has gained just under 60 percent this year
Crypto sector has rallied in 2023

The software that underpins the second-biggest crypto coin ether was upgraded on Wednesday and is online, cryptocurrency exchange Binance said in a tweet.

The move will give investors access to more than $30 billion (roughly Rs. 2,45,877 crore) of the digital tokens.

Known as Shapella, the latest upgrade to the Ethereum blockchain since its Merge upgrade will enable investors to redeem an offshoot of ether tokens that they have deposited in return for interest on the blockchain network over the past three years.

ETH to take over BTC? Twitter Reacts to Ethereum's Impending Shanghai Upgrade

Such so-called "staked ether" tokens currently account for about 15 percent of all ether tokens, according to data firm Dune Analytics, and are worth some $31 billion.

"The Shanghai/Shapella Upgrade is complete. Deposits & withdrawals for ETH, OP, ARB and ERC-20 tokens via the Ethereum, Optimism, and Arbitrum networks are now back online," Binance said in a tweet.

The changes will likely lead to heightened volatility for ether, investors have predicted.

Ethereum's Shapella Upgrade to Unlock Around $33 Billion of Staked Ether

Some believe that widespread redemptions could lead to a wave of selling, in turn weighing on the price of ether, whose market value of about $230 billion is topped only by bitcoin.

"The release of this previously unrealised investment may lead to significant downward price pressure if it is immediately liquidated," Deutsche Bank analysts said in a note.

In its last significant upgrade, Ethereum in September drastically reduced its energy usage - a move proponents said would give Ethereum an advantage as it seeks to surpass bitcoin.

But ether has continued to lag its larger rival, gaining just under 60 percent this year versus a more than 80 percent jump for bitcoin.

After trillions of dollars were wiped from the crypto market in a bruising 2022, the sector has rallied in 2023 on expectations that central bank interest rate hikes are slowing.

Ethereum has grown popular in so-called decentralised finance applications, which offer financial services while avoiding traditional industry gatekeepers such as banks.

It remains, however, little used in mainstream commerce or finance.

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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