2 - 4 minute read
Digital asset-management firm Runa Digital Assets’ Chief Operating Officer, Max Williams, predicts that layer 2 blockchains will benefit from Ethereum’s upcoming Shanghai hard fork. The upgrade, which is scheduled for April 12, is poised to boost Ethereum’s capacity to handle more transactions, lower fees, and allow withdrawals from staking ETH.
Shanghai’s hard fork, dubbed Shapella, will be the final upgrade in Ethereum’s migration to a proof-of-stake (PoS) method of maintaining the network. PoS aims to replace the proof-of-work (PoW) method used by Bitcoin and other cryptocurrencies. Unlike PoW, PoS is a more energy-efficient method that reduces the complexity and time required to verify transactions leading to faster and cheaper transactions.
According to Williams’ report on Ethereum’s upgrade, the layer 2 sub-sector is already showing signs of growth. Additionally, Shapella will give developers ample time to improve user experience further.
Ahead of Shanghai’s upgrade in April, two other significant upgrades have taken place. Guangzhou, which took place on January 4, saw the introduction of new features, including a tracking system to limit double-spending and gas fee changes. The Capella hard fork, which took place on February 1, aimed to increase Ethereum’s transaction speed and network capacity.
What This Means for Ethereum Traders
Ethereum’s migration to PoS aims to reduce transaction costs while increasing the network’s capacity to handle transactions. This is good news for traders looking to buy or hold Ethereum. With the imminent upgrade set to reduce fees, traders are likely to benefit from lower transaction fees and faster trade times. Additionally, developers’ increased focus to improve layer 2 sub-sector user experience will further boost the asset’s value.
Ethereum’s Shanghai upgrade is poised to boost the network’s capacity to handle more transactions, reduce fees, and allow withdrawals from staking ETH. Additionally, the layer 2 sub-sector’s growth, along with developers’ increased focus, will improve Ethereum’s user experience further. Traders looking to buy or hold Ethereum can expect lower transaction fees and faster transaction times. As always, the crypto asset remains volatile, and traders are advised to conduct due diligence before making investment decisions.