# What is Ethereum Shanghai Upgrade?

By [crypto-kingpin.eth](https://paragraph.com/@crypto-kingpin-eth) · 2023-03-06

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### What is Ethereum Shanghai Upgrade?

ethereum merge took place on Sep 15, 2022, taking the Network from **proof-of-work** to **proof-of-stake** . As a result, Ethereum eliminated mining and introduced staking

this staking was a bit different than other POS blockchains, since you **can’t withdraw** your ETH tokens

### How Shanghai Update Will Effect ETH?

there are a few scenarios that may happen to ETH:

**1-** being unable to withdraw the staked tokens, makes people **less interested** in staking their tokens, you can clearly see this since only **14%** of the total ETH in circulation is being **staked**. this number for **cardano** is **72%** since you can stake and **unstake** your tokens whenever you want. shanghai upgrade can **encourage** more holders to stake their ETH and this staking can **decrease** the number of tokens in circulation which will increase the price

**2-** the bearish case is where stakers want to **sell** their tokens to **take profit**, since for a lot of stakers, price of ETH was **600$** when they staked their ETH and this means they can make a huge profit and this **selling pressure** can cause a **decrease** in price. the team has set a **maximum amount** for the withdrawals (50000 per day) to prevent the price from crashing too hard, but I am not sure if this can save ETH from going down

### When is Shanghai Upgrade Coming?

Ethereum’s Shanghai upgrade is a hard fork slated for **March 2023**. The upgrade will introduce the Ethereum improvement proposal EIP – 4895 and add withdrawal functionality

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*Originally published on [crypto-kingpin.eth](https://paragraph.com/@crypto-kingpin-eth/what-is-ethereum-shanghai-upgrade)*