The Merge made Ethereum (ETH) one of the most significant issues in the cryptocurrency market in 2022.
The upgrade altered the consensus architecture of the alternative cryptocurrency from proof of work (PoW) to proof of stake (PoS). It was the first time in the history of the blockchain industry that a fully operational network altered its consensus methodology.
This was a significant step toward Ethereum 2.0, and more advancements are anticipated in 2023. The first item on the list is the Shanghai hard fork. It intends to unlock ETH invested in Beacon Chain’s staking function since 2020.
The cryptocurrency development team has set March as the deadline for this release. As with The Merge, a testnet must be placed beforehand to guarantee that the delivery date is reached and that Shanghai is executed without incident.
In the first developer call of the year, they revealed that a test would be administered in February. Moreover, they chose to reject any new Ethereum Improvement Proposals (EIPs) from Shanghai.
Developers should implement the EVM Object Format (EOF) to eliminate hard fork latency problems. This suggestion may enhance the Ethereum Virtual Machine (EVM) development environment and make sure everything runs properly in the last month of the first quarter of 2023.
However, preparations for Shanghai did not begin immediately. A public testing network will be made available. In December, testing started in a controlled setting with developers. On January 6, the progression had reached block 4,000.
The greatest expected reason is the decrease in Ethereum’s staking decentralisation. Since the Beacon Chain period, few crypto firms manage the quantity of ETH in staking. This is a huge issue for investors in the market’s main cryptocurrency.
With altcoins abandoning these sites, there should be less centralization. This may be aided by the fact that beginning in the second quarter of 2023, ETH staking will have liquidity, which may encourage more users to participate in the network and receive passive revenue for this service.
Additionally, it is anticipated that additional shared staking systems for Ethereum will arise. Lido DAO has been quite popular because of the fact that it enables small investors to stake cryptocurrency without having to spend 32 ETH. This facility, however, has made it the leading centralizer of cryptocurrency staking.
Obviously, this would not be Lido’s fault. Ultimately, it is accomplishing its objective. However, the blockchain industry is well aware of the risks associated with entrusting its currency to a single participant. In other words, the introduction of additional staking platforms is essential for the Ethereum network to become more decentralised and less dependent on a single corporation or cryptocurrency exchange.
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