Tl;dr: The Ethereum network is scheduled to hit the Shapella Upgrade on Wednesday, April 12th, 2023. Shapella is a hard fork, which is another way to say an essential upgrade for Ethereum. It has also been long-awaited as it will unlock ETH that has been staked for a long time.
Here are the 5 things you should know!
#1 – Take NO action: As with most Ethereum network upgrades, you do not need to take any action, so there’s no need to be concerned about your ETH. While various parts of the Ethereum infrastructure will be making changes, there is no action needed for regular users of the Ethereum ecosystem. Heads up: If you get emails, messages or DMs telling you to do something – watch out: They are likely scams! (See point #5, below).
#2 – ETH staking will unlock: This is likely the most significant part of the Shapella upgrade. As of April 12th, ETH validators should be able to withdraw the more than 18 million staked ETH that have been locked since 2020 – valued at about $31 billion, or 15% of the supply of ETH in circulation.
This is Ethereum’s most significant upgrade since the Merge, which took place in September 2022. As a result of the Merge, Ethereum shifted from being a proof of work to a proof of stake protocol, which is considered to be more environmentally friendly and rewards validators who stake, or lock their crypto into the Ethereum consensus layer.
It’s worth mentioning: Not everyone can un-stake all of their ETH at once, so it is unlikely that a lot of unlocked ETH will quickly flood the market. To perform a full withdrawal, validators must line up to un-stake based on a first-in, first-out basis, with a set limit built into the system. This can take days or even weeks, depending on the withdrawal demand.
#3 – More secure: Shapella will improve Ethereum’s security by making it more challenging for hackers to steal funds or interfere with consensus mechanisms, through improving network security protocols and adding additional trust over time as folks continue to stake in the system and support the growth of Ethereum.
#4 – Why Shapella and not Shanghai: You might have heard of the Shanghai or Capella upgrades. These are two upgrades happening simultaneously that are expected to be implemented to increase the Ethereum network’s security and robustness. Shapella is simply a combination of the two, a new name that organically grew from developers. Shanghai affects the execution layer, and Capella affects the consensus layer upgrade
#5 – Stay safe and vigilant: Hackers try to take advantage of users during times of increased news and potential confusion. Be especially wary of anyone claiming you must “take action” during these upgrades. They are probably scams.
Q: What does the Shapella upgrade mean for my Zengo Wallet?
A: Nothing! There is no need to take any action.
Q: Remind me again: What’s the Ethereum Merge?
A: Take a look at this article for a deep dive.
Q: I hold a little bit of ETH in my wallet. Any need for me to protect it when Shapella happens?
A: As a regular user, there is no need for you to take any actions, your ETH is all set. If someone contacts you and tells you you must take action, be weary!
Q: How will this affect the ETH tokens in my Zengo wallet?
A: Not at all! Your ETH will be in your wallet with the same address as usual.
Q: I have more questions.
A: Great – we are here for you, 24/7! Just reach out to our live in-app customer support by tapping on the support icon in the top-right corner of your Zengo Wallet.