Ethereum has been doing quite well lately as it hits a 7-month high and broke the $1,900 resistance, with major upgrades on the way. The upcoming upgrades are Shanghai and Capella, which refer to the fork on the execution layer client side and the upgrade of the consensus layer client side, respectively. It is scheduled to happen on April 12th and will unblock the withdrawals on the beacon chain next week.
Upcoming Ethereum upgrades
At present, Ethereum is trading below $1,900 as the price has fallen below the important support. Bitcoin has also pulled below $28,000, which is a negative sign. However, the upgrades that are on the way for Ethereum could help propel its price back to newer heights. The hard fork that is scheduled is called the Improvement Proposal (EIP)-4895, which will allow network validators and stakers to withdraw Ethereum from the beacon chain. It will also improve transaction speeds and reduce transaction costs.
Alongside these upgrades, another major reason for the positive price action could be the quantitative easing that the federal reserve is expected to do. They have already halted the interest rate hikes, and in order to boost the economy, the rates could be dropped soon. At the same time, the general positivity in the market due to Bitcoin’s good price action is another reason.
More about the Shanghai and Capella upgrades
The upcoming Shanghai upgrade will prioritize the implementation of withdrawals on the execution layer. This entails the introduction of a new transaction type, namely withdrawals (EIP4895), which will facilitate the transfer of funds from the consensus layer to the execution layer. At present, both stake and consensus layer rewards have been locked since the launch of ETH staking on the Beacon Chain more than two years ago.
On the other hand, Capella is the consensus layer upgrade needed for withdrawals, which can be divided into two types: full and partial. Full withdrawals involve a validator exiting the active validator set, making their stake and accrued rewards withdrawable after a delay. Partial withdrawals are automatic, and any amount above 32 ETH is sent to the validator’s withdrawal address.
Validators with over 32 ETH do not earn additional rewards, which is why the protocol withdraws the excess automatically. Capella specifications provide useful information for ETH stakers interested in understanding the withdrawal process. The CL handles the interactions required for withdrawals, while the EL processes withdrawal requests and sends the ETH to the correct address.
What are your thoughts as Ethereum hits a 7-month high, crossing $1,900? And do you think the market is due for a correction? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.