Scalability Becomes The Focus of Ethereum After Shapella Upgrade

4 Mins read

Now that the Shapella upgrade is in the rear-view window, many crypto specialists wonder what Ethereum has in store for the following period. Vitalik Buterin, the creator of Ethereum, revealed that the group of developers intends to prioritize scalability in the following period, as it’s vital for the planned forks. After the Shapella upgrade, we noticed an increase in the number of people researching how to buy Ethereum because the two forks enabled stakers to withdraw their rewards and use them as they find suitable. 

The Shanghai and Capella forks have been two major events since the Merge, the big upgrade that enabled Ethereum to transition from the Proof-of-Work to the Proof-of-Stake algorithm in September 2022. Ethereum supporters state that Shapella was the final step in the Merge upgrade because it brought some improvements the event from the fall didn’t include. Withdrawals are crucial for the blockchain, so naturally, the focus will move to scaling in the following period, which is meant to improve the network. Buterin believes that if Ethereum doesn’t improve scaling before the bear market ends, holders will pay even $500 transaction fees, which would turn disastrous for the ecosystem’s popularity. 

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Let’s discuss scalability

Ethereum’s creator, Vitalik Buterin, revealed that the next upgrade is scheduled for the beginning of 2024 and will target proto-dank sharding (EIP-4844). The next upgrade is predicted to boost Ethereum’s scalability because it should replace call data with data blobs, which are easier to process by the network because they’re less block space intensive. According to Buterin, transaction data is the underlying obstacle for scaling rollups, and dealing with this issue is paramount. 

Proto-dank sharding should enhance the network’s scalability 10 times, so the effort made towards the completion of EIP-4844 is moving at a fast pace. It’s essential to note that the following upgrade is pivotal for the full sharding of the blockchain. 

How will Ethereum 2.0 revolutionize the blockchain?

Before discussing the improvements Ethereum 2.0 brings, it’s crucial to define it. Previously known as ETH2, Ethereum 2.0 is a series of upgrades the network performs to improve its scalability, efficiency, and speed. Its purpose is to enable the blockchain to reduce transaction fees, enhance smart contract stability, and handle more transactions. It’s predicted that when all upgrades are completed, Ethereum will be a transparent, open, and highly-performant network for DeFi. 

Ethereum 2.0 implies heavy sharding to lower gas costs and increase network bandwidth, making it more affordable for crypto holders to use smart contracts and send digital currencies. The upgrades will also bring numerous economic changes for the blockchain, enabling support to stake nodes and gain Ethereum as passive income. 

Ethereum 2.0 will be completed in three stages:

– Phase 0 – the Beacon Chain, which was completed in 2020. It introduced the PoS to the blockchain and aimed to function as a consensus layer and coordinate the network’s operations. It was essential in the process of generating the randomness necessary to confirm new blocks. 

– Phase 1 – the Merge, which was completed in 2022. It enabled the ecosystem to switch from the Beacon Chain to the Proof-of-Stake consensus and lower the amount of energy used. Once the Merge was completed, ETH1 and ETH2 became a single network that uses the ETH token. Many crypto experts compare the upgrade with a switch in engines from a gas-powered one to an electric one while the vehicle is still moving. The Merge improved the network’s sustainability because the new consensus no longer requires miners to use huge amounts of energy to confirm blocks. According to statistics, Ethereum uses 99.9% less energy than when it used the previous algorithm, meaning that it’s one of the most energy-efficient blockchains. 

– Phase 2 – Sharding which is in process at the moment. When completed, this upgrade will split the database horizontally and work with layer 2 rollups. The network will handle large amounts of data easier because there will be rollups on the entire blockchain. 

How far is Ethereum 2.0?

Several upgrades have been completed since the launch of the Beacon Chain: Berlin, London, Altair, and Shanghai. The Shanghai upgrade is the last completed and has enabled stakers to withdraw their rewards. The next major upgrade scheduled for the Ethereum network is called Cancun and will aim at proto-dank sharding, which will lower transaction times and feed and enhance scalability. 

Let’s find out more about the Shapella upgrade

Ethereum completed the Shapella (also known as Shanghai) upgrade in April 2023. The name Shapella comes from combining the title of the execution layer called Shanghai and the consensus layer named Capella. It was a key step in the Ethereum 2.0 full upgrade because it enabled stakers to withdraw the funds they earned from the Beacon Chain while the network was preparing for the Merge. It improves the security of the new consensus protocol and boosts the overall reliability of the ecosystem. 

The full effect of the Shapella was witnessed a couple of days later after it was completed when the ETH price started to gain ground. 

Ethereum 2.0 will bring stability to the network

Vitalik Buterin is happy with the outcome of the last upgrades. However, he believes that the network is still in its throes because some disruptive changes are still to come. He predicts that the blockchain will become more stable once it executes all upgrades and the scalability roadmap is complete. Ethereum 2.0 upgrades target the fastest and hardest parts of the transition to the new consensus, and once they’re done, the scaling is also finished. However, several other updates will be required, but the network developers can move at a slower pace. 

At the moment, the network processes from 16 to 25 tps in around 6 minutes, congesting the blockchain and triggering high gas fees. The upgrades should increase the tps to 100,000, leading to lower gas fees and a more efficient network. The completion of the Ethereum 2.0 upgrade should also mark the slowing down of the protocol, making it more predictable and safer. 

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