Although in the first quarter of this year prices “Bitcoin” considered to be the most prominent increase of more than 70%, but for “ETH” No. 2 Cryptocurrency by Crypto Market There is going to be an important event in April 2023 that is an upgrade. “Ethereum Shapella” How will this major event affect cryptocurrencies? How should investors prepare a response plan?
Mr. Woramet Chansen, investment adviser, Mercle Capital Company Limited gave an interesting perspective on the world’s second largest cryptocurrency that, from the past, there were important announcements from the Ethereum Foundation. The upcoming “Ethereum shapella” upgrade on April 12 is the next major upgrade for Ethereum after “The merge.” 2022 before
“The Merge” from “Proof of work” (POW) to “Proof of stake” (POS)
The “The Merge” upgrade allows Ethereum’s operating system to be switched from Proof of work (POW) to Proof of stake (POS). In the past, Ethereum used a Proof of Work system, in which coins could be mined by using an electric miner. But after changing to Proof of Stake, ETH coins will be reborn by locking coins (Staking) instead. This system makes new ETH coins less and uses less electricity. The whole approach is agreed upon by the Ethereum foundation, with Votalik Buterin as the core. The Shapella upgrade in April 2023 will allow the Ethereum system to add an ETH withdrawal feature (Unstaking ETH) to locked investors. last year This feature will increase the liquidity of ETH and reduce the fees for confirming transactions on the Ethereum chain.
So, at present, to be a part of the Ethereum chain or want to earn ETH coins can be done by staking ETH coins for a minimum of 32 ETH and will receive a return of approximately 4.5% per year. There is currently no locked ETH withdrawal system.
This is considered a liquidity problem that makes both large and small players dare not use their own ETH coins for staking. In addition, more than 32 ETH is required, valued in baht, approximately two million baht (current prices), which must It takes a very big cost for a retailer. Thus, the liquid staking service business was born to help retailers to lock or withdraw ETH conveniently or easily. by reducing the number of locked days Set a minimum of less than 32 ETH, making it easier to access. And the “Ethereum Shapella” upgrade adds instructions to withdraw locked ETH. make the liquidity problem go away as well as lowering the Ethereum chain’s fees.
Summary of 3 main issues dealing with “Ethereum shapella”
1. Direct impact on the price of ETH – ETH that are locked for more than 6 months can be withdrawn There is a chance of short-term selling pressure from some investors withdrawing from the system. But if looking at the long term The upgrade will make it easier for people to access ETH locks, as well as lower transaction fees. The reason for this is that more people on other networks or new investors will come to use the Ethereum chain, which is good for the price in the long run.
2. Impact on the price of liquid staking coins – This group of coins is another group that will also be affected by this upgrade if ETH withdrawal can be done manually. There is a chance that some investors are concerned about the security of the platform and lock directly with Ethereum, but the 32 ETH minimum is still a problem. Causing short-term selling pressure to occur, but in the long term, the factors of users tend to be similar to the above. is that this upgrade makes Ethereum more accessible to users, so investors who want to lock in small amounts of money still use the liquid staking group as before. Caution!! Minimize risk by using illiquid platforms or taking ETH as profitable. For higher security, platforms that are at the forefront of this sector can be used, such as Lido or Rocket pool, etc.
3. Impact on the Ethereum Ecosystem Overall – This upgrade is another event that makes the transaction cost cheaper. This will make accessing the Ehereum ecosystem easier and will result in an increase in the number of users on the ETH chain, which will further benefit the value of the platform and the overall coin price of the Ethereum ecosystem.
