This new Ethereum upgrade will bring lower gas fees and faster transactions

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The ethereum blockchain network is preparing for a new quite important update called Shanghai, which will make it easier to withdraw staked Ether (sETH) along with lower gas fees. Ethereum developers have already released the testnet version called Shandong.

The developers will begin work on implementing these critical improvements. This process is likely to continue until September 2023. Last month, the Ethereum network underwent an upgrade The Merge by combining the Ethereum mainnet with Beacon Chain.

This update moved the Ethereum consensus model from Proof of Work to Proof of Stake. Market experts call it a revolutionary achievement that will significantly improve the efficiency and scalability of the ethereum blockchain. Furthermore, it makes the Ethereum blockchain much more environmentally friendly, reducing power consumption by 99 percent.

Now, the next Shanghai update will bring an elemental change to the Ethereum Virtual Machine (EVM), a software that powers smart contracts on the Ethereum blockchain. The Ethereum EIP-3540 improvement proposal will be the most anticipated update from the community that separates encryption from data. Speaking about the proposal to Cointelegraph, Galen Moore, Content Lead at Axelar, said:

From my perspective, EIP-3540 is the most significant update proposed for Shanghai. It is one more step towards interoperability within the Ethereum ecosystem. Currently, layer 2 networks on Ethereum use a cumbersome code validation process. EIP-3540 separates code and data, making the process more efficient. This is especially good news for the growing ecosystem of Polygon Supernets: chains of decentralized applications built on Polygon Edge.

Withdrawal of staked Ether (sETH)

As of now, ETH staked validators cannot withdraw funds directly to ensure network stability. Ethereum enhancement proposal EIP-4895 will enable sETH withdrawals and rewards earned through the Beacon Chain.

In addition to these proposals under consideration, the upgrade will bring changes to some layer 2 protocols. The Shanghai upgrade will lower the gas fee by equalizing block sizes while increasing the efficiency of call data in the net. Moore added:

When specialized chains can build on top of a layer 2 like Polygon and reduce the cost of communicating with the Ethereum base chain, that lowers gas prices for users everywhere in the ecosystem by making it more efficient to scale out from one way to distribute demand.

The update The Merge last month was just the beginning of major improvements to the Ethereum blockchain. The next upgrade in the line will be the Surge. This will be an important step in improving the scalability of Ethereum’s ability to store and access data. Other developments will be Verge, Purge and Splurge. These will be the last three steps in the continued development of Ethereum and will happen for years to come.

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