Macauley Peterson

If there’s just one thing that investors want to know about post-Merge Ethereum, it is this: Wen withdrawals?



It has long been known that ether locked on the <a href="https://www.blockworksresearch.com/glossary#beacon-chain">Beacon Chain</a> — now staked on the Ethereum mainnet — would remain stuck until its next upgrade, Shanghai.&nbsp;



And it’s also long been known that Ethereum’s typically vague timelines are <a href="https://blockworks.co/news/weth-fud-is-a-joke">easy fodder for FUD</a>.



Thursday’s All Core Devs (ACD) call — the last in 2022 — made one thing abundantly clear: Staked ether withdrawals are coming, and, by all accounts, they are on schedule.&nbsp;



There’s a simple reason precise roadmaps and concrete schedules are hard to come by on the world’s second most valuable blockchain network. Ethereum development is decentralized.



Periodic developer calls bring together disparate teams to seek consensus on priorities, a process that’s grown organically over the years of Ethereum’s evolution — yet, at times, still feels chaotic.



Tim Beiko, who coordinates the ACD calls, said everyone seems to collectively agree on a common goal: “we want withdrawals to happen relatively quickly on mainnet.”



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“This is clearly the highest priority for everybody,” Beiko said. “Teams are working on it…People seem to generally want a target around March-ish,” he added.
</blockquote>



Any upgrade of this nature, even a simple change focusing on withdrawals alone, will require a carefully coordinated <a href="https://www.blockworksresearch.com/glossary#hard-fork" target="_blank" rel="noreferrer noopener">hard fork</a> of the Ethereum mainnet. The testing process needed in advance takes more than a month, which means that a key milestone — so-called “mainnet shadow forks” — will need to be ready by the end of January at the latest.



Is that doable? The clear consensus on the call was, yes.



Barnabas Busa a DevOps engineer at the Ethereum Foundation said two private testnets are already testing Ethereum consensus layer clients — the part of the network that adds new blocks to the blockchain.



“Full withdrawal is working on both chains,” Busa told the other core developers. “Partial withdrawal is working on both chains.”



Still to come are tests on “mass withdrawals where we just have a big queue and we have a large number of exits,” along with various edge cases — efforts to try to break the process and thereby learn and improve the network’s resiliency.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“We would like to start a public testnet hopefully on the 15th or 16th of December,” Busa added.
</blockquote>



One by one, client teams weighed in: Prysm, Lighthouse, Geth, Erigon, Nethermind, Teku, Besu, Lodestar — all signaled their willingness to commit to a March target for a Shanghai hard fork to include withdrawals of staked ether.



Phil Ngo, representing Lodestar, one of the Ethereum consensus clients, told the group that “we are pretty much good for withdrawals at this point.”



Others either echoed the sentiment, or sounded optimistic that the requisite deadlines could be met to make it happen.



But can developers do even more and, if so, how much?



The definitive answer, whether Shanghai will focus on withdrawals exclusively or add another significant improvement, is slated to come in the next ACD call on Jan. 5, 2023.



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Developers

Ethereum Devs Still Want Staking Withdrawals by ‘March-ish’

<div id="highlights-block_62bdd4b2a6493" class="highlights">
 <ul>
 <li>The hard fork pushed back the so-called “difficulty bomb,” which had been gradually slowing Ethereum block production, improving performance in the short term</li>
 <li>The Merge has not been scheduled, but the new timing of the difficulty bomb points to when Ethereum core developers think it will take effect</li>
 </ul>
 
</div>



Ethereum’s scheduled Grey Glacier hard fork went into effect on Thursday at 6:54 am ET — <a href="https://etherscan.io/block/15050000" target="_blank" rel="noreferrer noopener">Block 15050000</a> to be precise — and caused no problems, according to Ethereum client developer <a href="https://nethermind.io/" target="_blank" rel="noreferrer noopener">Nethermind</a> and the Ethereum Foundation’s <a href="https://twitter.com/TimBeiko/status/1542463390475423745" target="_blank" rel="noreferrer noopener">Tim Beiko</a>.&nbsp;



The sole purpose of the fork was to postpone the so-called <a href="https://ethereum.org/en/glossary/#difficulty-bomb" target="_blank" rel="noreferrer noopener">difficulty bomb</a> by about three months. That remains the most likely time frame for the hotly anticipated <a href="https://cms.blockworks.co/shadow-forks-and-testnets-the-ethereum-merge-approaches/" target="_blank" rel="noreferrer noopener">Merge with the proof-of-stake Beacon Chain</a>. A hard <a href="https://www.blockworksresearch.com/glossary/?search=fork" target="_blank" rel="noreferrer noopener">fork</a> is a software upgrade that splits a blockchain in two, with all network participants coordinating around the new chain.



Learn More: <a href="https://cms.blockworks.co/the-investors-guide-to-the-ethereum-merge/">The Investor&#8217;s Guide to the Ethereum Merge</a> 



The difficulty bomb doesn’t “go off” all at once, but it gradually forces an “exponential increase in proof-of-work difficulty setting designed to motivate the transition [from proof-of-work] to proof-of-stake,” according to ethereum.org. In essence, it deliberately increases the time it takes to make a new block of transactions, slowing down the network. As a result, miners have no incentive to continue mining the proof-of-work chain as it gradually grinds to a halt.



A prior hard fork, in December 2021, postponed the difficulty bomb until June, when the Ethereum community previously hoped to execute The Merge. So the Ethereum network was in fact slowing down; block production times had increased from the usual 12-14 seconds to 16 seconds in recent weeks.



The new network upgrade pushes back the bomb — also known as the Ice Age — by 700,000 Ethereum blocks, or around 100 days’ time, restoring the status quo.



The upgrade passed by so smoothly, it was barely mentioned during Thursday’s <a href="https://youtu.be/Fid8hTxkRHM?t=1177" target="_blank" rel="noreferrer noopener">Ethereum Core Developers Meeting</a> to discuss The Merge.



“Grey Glacier went fine, by the way,” Marius van der Wijden said during the call, noting that only a small fraction of Ethereum nodes had not upgraded in time.



Shortly before the hard fork, Ethereum passed another milestone, <a href="https://watchtheburn.com/" target="_blank" rel="noreferrer noopener">burning 2.5 million ETH</a>, thanks to <a href="https://cms.blockworks.co/?s=eip+1559" target="_blank" rel="noreferrer noopener">EIP-1559</a>, an upgrade activated in August 2021. That represents over $2.5 billion in value, which offsets some of the ETH issuance through proof-of-work. After The Merge ether issuance is expected to drop by as much as 90%.



If it doesn’t get postponed again, the new difficulty bomb will start to take effect in October, giving developers a clear target by when to deliver The Merge upgrade and execute the historic transition to a proof-of-stake regime.



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