The Shanghai Ethereum Update
Ethereum has completed its years-long transition to proof of stake with the successful implementation of the Shanghai upgrade. At 6:27 pm EST, the network forked to integrate the upgrade, enabling the withdrawal of staked ETH and finalizing the network’s transition. Since ETH staking debuted in 2020, participants have deposited over $34.56 billion worth of ETH with the network, but those funds and the rewards generated by them were not accessible to users, even after the merge event. Now, with Shanghai’s implementation, those funds are available for withdrawal.
Stakers who deposited at least 32 ETH directly with Ethereum will be able to withdraw their profits or their entire deposit. However, stakers who deposited their ETH through intermediary staking pools or centralized crypto exchanges will have to wait. Lido has said staked ETH withdrawal capability will be introduced for customers in about a month, while Coinbase has said its customers may have to wait several months before their staked ETH is accessible. Each intermediary ETH staking service will unroll withdrawals on its own timeframe.
The Shanghai upgrade was a significant development for Ethereum, which saw rapid growth in recent years and became one of the leading players in the crypto exchange space. The network’s transition to a proof-of-stake consensus mechanism means that users stake ETH with the network to validate on-chain transactions and are rewarded for that participation with newly generated ETH. The upgrade saw Ethereum transition to a proof-of-stake consensus mechanism, replacing the energy-intensive proof-of-work mechanism.
The Shanghai upgrade was originally meant to include numerous other improvements, including proto-dank sharding—a streamlined data-sampling process that would make layer-2 transactions on the network substantially cheaper and faster—and EOF, a suite of much-needed updates to the Ethereum Virtual Machine (EVM), the mechanism underlying the network that deploys smart contracts. However, those updates were nixed to ensure that ETH withdrawals were rolled out as quickly as possible. The Shanghai upgrade was under pressure to ensure the security and accessibility of tens of billions of dollars worth of cryptocurrency, and any flaws in the upgrade’s execution could have spelled massive trouble for the network.
Crypto exchange FTX has recovered $7.3 billion in assets from its former banking partner, Binance, and will consider rebooting its exchange in Q2 2023, according to CEO Sam Bankman-Fried. The recovery comes after Binance seized the assets earlier this year, citing concerns about money laundering and other illegal activities. FTX has since switched to a new banking partner and has been working to recover the seized assets.
The recovery of the assets is a significant development for FTX, which has seen rapid growth in recent years and has become one of the leading players in the crypto exchange space. The exchange has also made several high-profile acquisitions, including Blockfolio and LedgerX, and has attracted investment from major players in the finance and tech industries.
The news of FTX's asset recovery comes amid a wider crackdown on the crypto industry by regulators around the world. Many exchanges and other crypto businesses have been targeted by authorities over concerns about money laundering, fraud, and other illegal activities.
The US Is Falling Behind In Crypto: a16z
The United States is losing its edge in global crypto leadership, according to the 'State of Crypto' report by venture capital firm Andreessen Horowitz. The report argues that despite the US being the birthplace of Bitcoin and home to many of the world's leading cryptocurrency companies, regulatory uncertainty and a lack of clear guidelines have caused the country to fall behind other nations in terms of crypto innovation.
a16z notes that the US lags behind countries like China, Singapore, and Switzerland in areas such as regulatory clarity, tax policy, and government support for crypto innovation. This is despite the US being the largest economy in the world and home to many of the world's leading tech companies.
The report also highlights the growing influence of decentralized finance (DeFi), which has seen explosive growth in recent years and is now worth more than $100 billion. DeFi, which allows users to access financial services without intermediaries like banks, has been a major driver of innovation in the crypto space, and many of the leading DeFi projects are based outside the US.
'State of Crypto' concludes by calling on the US government to take a more proactive approach to regulate the crypto industry and support innovation in the space. It argues that failure to do so could result in the US falling further behind other nations and losing its position as a global leader in technology and finance.