The Importance of "Shanghai Update"

Expected to take place in the second half of 2023. The upgrade will be an important milestone as it will allow holders who have deposited their stakes in Ether for staking for years to definitely withdraw them, thus making the network more scalable.

In addition to some of the main updates, aiming at one of the main pillars of the trilemma related to scalability on the network, the next update also aims for some improvements, focused on EIP3651, 3855, and 3860. Among all these proposals, one of the most awaited, the WARM Coinbase, can be considered a game-changer for reducing gas rates for some of the main players in the network, the builders.

In this specific case, builders use it to receive new tokens on the network. Every new transaction on this platform needs to interact with Warm Coinbase multiple times. The first interaction costs more as the platform needs to “warm up”. Then rates decrease as interactions increase. However, with the introduction of the EIP3651, it will be "hot" from the start, thus requiring lower gas rates to access it.

The main functions of the agents will not be changed, the constructors continue to be responsible for the packaging of the transactions in the network, with the formatting in blocks. These transactions are then forwarded to validators, who place them in the correct order on the blockchain.

While validators using constructors will benefit the most from this update, traders using constructors to execute their trades can also benefit as they will no longer have to pay transaction fees for uncompleted trades. Currently, traders are also charged for failed transactions because miners need to confirm transactions to the chain, whether they are successful or not.

The testnet version, dubbed Shandong, was released on October 18, 2022, and the developers of the protocol will work on various implementations until September 2023. Until then, we may witness possible instabilities in the construction of our projects. It remains for us to wait.