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Ethereum Shanghai update: What you need to know about the Shandong testnet launch

By Darius McQuaid

12:03, 18 October 2022

Visual representation of the digital Cryptocurrency Ethereum Crypto and Bitcoin, in Brussels, Belgium on 22 September 2022
One aspect of the upgrade is to allow blockchain validators to withdraw their 32 ether from staking contracts - Photo: Getty Images

Ethereum (ETH) core developers are now focusing their attention after The Merge on the cryptocurrency’s next upgrade, Shanghai, starting with the “Shandong” test network (testnet) launch.  

The Ethereum Foundation announced the news of the new upgrade on 14 October.  

The EF JavaScript Team said: “This is an experimental testnet run in cooperation with EF DevOps which activates a set of selected Shanghai-considered EIPs for early client testing.”

An aspect of this upgrade is to allow blockchain validators to withdraw their 32 ether from staking contracts.

Currently those who stake ether and are a validator cannot withdraw their 32 ether once they have staked it.

The Shanghai upgrade will introduce a code that will allow Ethereum Network validators to withdraw their staked ether.   

Shandong will also be used to activate five Ethereum improvement proposals (EIPs). They are: EIP-3540; EVM Object Format (EOF) v1, EIP-3651; Warm COINBASE, EIP-3670; EOF-Code Validation, EIP-3855, PUSH0 Instruction; and EIP-3860, Limit and meter initcode.

The full Shanghai upgrade launch has been scheduled for September 2023 at the latest.

The announcement has led to a rise in the value of ETH; early on 18 October the digital asset was up by 0.62% in the past 24 hours to $1,327, according to CoinMarketCap.

Parithosh Jayanthi, a devops engineer at the Ethereum Foundation, told CoinDesk: “The Shandong testnet is meant to give developers a chance to try out the potential EIPs to find issues.

ETH/USD

3,139.16 Price
+0.510% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

DOGE/USD

0.11 Price
+0.600% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.48 Price
+6.970% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BCH/USD

375.55 Price
+6.860% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

“I think it’ll be one of the major talking points once All Core Developers calls start again.”

ETH to USD 

Has The Merge made ETH a security?

The Ethereum Merge, the switch from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism, may now mean that the crypto falls under the category of a security, according to the chair of the US Securities and Exchange Commission (SEC), Gary Gensler.

Gensler, speaking on 15 September, said that how cryptocurrencies and intermediaries allow holders to “stake” their coins might pass the Howey test, which is a way to assess if a transaction qualifies as an “investment contract” and is therefore considered a security.

Gensler said: “From the coin’s perspective… that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others.”

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ETH drops below $1,500 after The Merge

Despite The Merge being a long-awaited event for the ETH community, it did not result in a price increase for the crypto. After The Merge was completed, ETH plunged below $1,500 to $1,464 on 16 September.

The previous day saw ETH ranked as one of the worst performing cryptos, according to CoinMarketCap data, which placed ether in sixth place among the top losers with a 5.17% fall in price over the previous 24 hours.

Ethereum also initially dropped once The Merge was completed and fell by 7.24% over a 24-hour period.  

The crypto has not managed to reclaim its $1,500 value since 15 September.

Markets in this article

ETH/USD
Ethereum / USD
3139.16 USD
15.91 +0.510%

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The difference between trading assets and CFDs
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You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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