Welcome to Valid Points. In today’s issue, Margaux Nijkerk dives into the upcoming upgrades that will shape the Ethereum ecosystem. If you’re feeling overwhelmed by all the upgrades and launches happening, we’ve got you covered with important dates to keep in mind.
The Shanghai upgrade, more accurately known as “Shapella,” will enable the release of staked ether (ETH) withdrawals. Ever since Ethereum transitioned to a proof-of-stake (PoS) consensus mechanism, the network began using validators who stake 32 ETH to approve and add blocks to the blockchain.
Before validators joined the PoS blockchain, they agreed that their staked ETH and any accrued rewards would remain locked up until Shanghai. Some validators have had their ETH locked up since as early as December 2020, when the PoS “Beacon Chain” went live. But finally, the time for unlocking those rewards is nearing.
Ethereum developers haven’t inked in an official date, but those working on the blockchain have said that they are aiming for March 2023 for the big upgrade.
Given that the calendar has already flipped to March, there’s a strong likelihood that Shanghai might be delayed to April. Ethereum developers ran a second-dress rehearsal of Shanghai earlier this week on the Sepolia testnet, but they have yet to decide when the final dress rehearsal will occur.
If developers continue to run tests three weeks apart as they have done with Sepolia and Zhejiang, Goerli will likely occur around March 20, which could push the mainnet Shanghai upgrade into early April. (Ethereum is notorious for running a touch behind schedule, although last year’s Merge won plaudits for its mostly smooth execution.)
Optimism to upgrade to Bedrock
Optimism, an Ethereum L2 scaling solution, will go through a major upgrade in March that aims to decrease transaction fees, increase the speed of transactions, and enhance smoother compatibility with the Ethereum Virtual Machine (EVM).
The layer-2 protocol aims to lower the cost of Ethereum transactions, while maintaining the security of the Ethereum blockchain. It does this by providing an “Optimistic rollup,” a type of scaling solution that bundles a bunch of transactions and sends them back to the Ethereum blockchain as a single transaction. The cost of that one transaction is then split among many users.
The upgrade, known as “Bedrock,” will be a major upgrade to the network. Some have said that the upgrade will help Optimism compete with its main competitor, Arbitrum.
Optimism initially tweeted in early February that it was reviewing the specifications for the Bedrock upgrade, scheduled for March 15. But a few weeks later, the Optimism Foundation announced that it would postpone the vote on the upgrade to March 2–April 5, due to some bugs found in the code changes.
The upgrade itself won’t affect end users, but it will take about four hours for Optimism to upgrade to Bedrock, according to a blog on their governance website. Given that Optimism was supposed to upgrade two weeks after the initial vote cycle, the new timeline appears to indicate Bedrock will go live in mid-April.
In February, OP Token, the native token for Optimism, surged 25% amid news of the Bedrock upgrade.
The ZK-rollup race intensifies
Another scaling project to Ethereum, Polygon, is coming out with its own rollup solution in March. Polygon has been working on its own Zero-Knowledge Rollup (ZK Rollup) for a while, and in February, announced the launch date of its beta zkEVM for March 27.
ZK rollups use complex cryptography that create “proofs” that show that a transaction is valid using only minimal information about that transaction. The zkEVM deploys the Ethereum Virtual Machine (EVM) for its ZK rollup, allowing developers to move over their Ethereum smart contracts without any hiccups.
ZK technology was once seen as a milestone that would be years away, but others in the ZK rollup space are racing to be the first to launch their rollup solutions.
Matter Labs recently announced that it would rebrand and open-source its ZK rollup, zkSync 2.0, to zkSync Era, though it did not say when the full network would go live. Scroll, another L2 on Ethereum, has also said they are coming out with their own ZK rollup. Earlier this week, Scroll announced that they were taking their zkEVM to Ethereum’s Goerli testnet.
So who will release their full-fledged ZK rollup first? Based on the heightened level of activity in this arena, the answer might come sooner rather than later.
On January 30, 2023, the U.S. Bankruptcy Court for the District of New Jersey (Trenton) approved BlockFi Inc.’s proposed bidding procedures. All interested bidder should carefully read the Notice of Bidding Procedures [Docket No. 441-2] and the Order [Docket No. 441]. Final bids of the debtors’ mining assets are due by February 20, 2023 at 12:00 p.m. Eastern Time and an auction, if any, will be held on February 28, 2023 at 10:00 a.m. Eastern Time.
Pulse Check
The following is an overview of network activity on the Ethereum Beacon Chain over the past week. For more information about the metrics featured in this section, check out our 101 explainer on ETH metrics.
Disclaimer: All profits made from CoinDesk’s Eth 2.0 staking venture will be donated to a charity of the company’s choosing once transfers are enabled on the network.
BlockFi Inc., et al, have established bar dates for submitting proofs of claim. Persons and entities that agree with their claim as listed in the Schedules [Docket Nos. 242, 247, 249, 251, 253, 255, 257, 259, 261] need not submit a proof of claim. Otherwise, all persons and entities that assert a claim against the debtors must submit a proof of claim before the bar dates outlined in the Bar Date Notice.
WHY IT MATTERS: Bored Ape Yacht Club parent company Yuga Labs is planning to release an NFT collection minted on the Bitcoin-based Ordinals protocol, which has steadily grown in popularity since its launch last month. Called TwelveFold, the collection will feature 300 generative art NFTs placed on a 12×12 grid, which serves as “a visual allegory for the cartography of data on the Bitcoin blockchain.” Yuga Labs plans to open its auction for TwelveFold later this week. Read more here.
WHY IT MATTERS: The total value of crypto assets deposited in liquid staking protocols was $14.26 billion as of Tuesday, making it the second-largest crypto market sector, according to data source DefiLlama. TVL for DeFi lending and borrowing protocols was $13.72 billion, the third largest, while decentralized exchanges, with deposits of $18.48, held the top spot. The Ethereum blockchain’s upcoming Shanghai software upgrade has galvanized investor interest in liquid staking, which is the best-performing crypto sector this year. Read more here.
WHY IT MATTERS: On Thursday, the testnet of Base was started by Coinbase, which joined Optimism as a core developer on the open-source OP Stack, a developer toolkit for the Optimism network. Base will not be limited to Ethereum; it will also provide easy and secure access to layer 2 networks such as Optimism and Solana. Coinbase would allow developers to directly integrate their products with Base and provide fiat onramps – targeting an estimated 110 million verified users and $80 billion in assets. Read more here.
Factoid of the Week
Open Comms
Valid Points incorporates information and data about CoinDesk’s own Eth 2.0 validator. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post.
You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is:
