Ethereum Testnet Zhejiang Completes Staked ETH Withdrawal
The Ethereum ecosystem took a significant step towards its move to a fully proof-of-stake network as the Zhejiang testnet processed its first withdrawals of staked ETH. This testnet was the first of three planned trials leading up to the upcoming Shanghai upgrade.
Ethereum Network Progresses towards Proof-of-Stake
Testnets, duplicates of the main blockchain, are used by developers and users to test their code changes before they are applied to the actual network. The Zhejiang testnet was followed by the Sepolia and Goerli updates.
Dress Rehearsal for Upcoming Shanghai Upgrade
The Zhejiang upgrade was designed as a dry run for the highly anticipated Shanghai update, set to occur in March. The Shanghai upgrade will mark the first major upgrade for Ethereum since its transition to proof-of-stake in September of last year, making the network more energy-efficient.
Validators to Reap Rewards of Staking ETH
Once the hard fork is complete, network validators will be able to withdraw 16 million staked ETH. These validators staked 32 ETH with the chain to participate in block validation and the more ETH they staked, the higher their chances of being selected to propose the next block of Ethereum transactions. The Ethereum ecosystem had informed validators that their rewards and staked ETH would be locked until the next upgrade to the chain.
Impact of Shanghai Upgrade on ETH Price
The Shanghai upgrade may result in either an increase in staking or a decline in the price of ETH due to pressure from stakers who may rush to withdraw their funds. Some experts predict an increase in staking, while others believe there may be a decline in the price of ETH.
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