NEWS
Ethereum in 2023: Here’s What to Look Forward To
Staked ether withdrawals are imminent
This will be the most pressing issue that Ethereum developers will tackle.
After September’s Merge, when Ethereum switched its consensus mechanism to proof-of-stake (PoS), the network began to use validators instead of miners to approve and add blocks to the Ethereum blockchain. Prior to the Merge, validators began staking 32 ether (ETH) on the PoS Beacon Chain in order to participate in the block validation process.
This article originally appeared in Valid Points, CoinDesk’s weekly newsletter breaking down Ethereum’s evolution and its impact on crypto markets. Subscribe to get it in your inbox every Wednesday.
But validators were made aware before they joined the network that their staked ETH and any accrued rewards would remain locked up until Ethereum’s next upgrade, known as Shanghai, which is now set for March.
Those that have been accruing rewards, some as early as December 2020 when the Beacon Chain went live, will finally be able to cash out their stake.
“Withdrawals are as good as done,” Marius Van Der Wijden, a Software Developer at the Ethereum Foundation, told CoinDesk. All that is left to do is to test the code that enables withdrawals, which “should be mostly done by February/March” Van Der Wijden added.
Proto-danksharding this fall, perhaps?
Another item that Ethereum developers are hoping to address is “proto-danksharding”, which derives from “sharding”.
Sharding is a method that splits up the network across several chains, or “shards”, in a way to make blockchain more scalable. Developers have compared sharding to adding new lanes to the highway; more cars are able to make use of that highway and can (ideally) travel down that road quicker as a result of less traffic.
The same goes for Ethereum transactions: shards will increase the amount of network activity the blockchain can process, therefore decreasing gas fees and allowing for faster transaction speeds.
Danksharding takes this same principle of splitting a network into shards, but instead of providing more space for transactions, it provides more space for “blobs” of data, allowing Ethereum to process more data.
An ambitious endeavor, Ethereum developers agreed it would be too ambitious for it to go live with staked ETH withdrawals in March. And since their priority is to allow stakers to withdraw their ETH ASAP, developers agreed to push proto-danksharding to an upgrade scheduled for the fall.
Parithosh Jayanthi, a DevOps Engineer at the Ethereum Foundation, told CoinDesk that he thinks that [proto-]danksharding will be “the most exciting thing devs will work on in 2023.” Jayanthi also added that proto-danksharding has “the potential to onboard millions of users and truly provide scalability to Ethereum.”
Dealing with Ethereum’s censorship problem and centralization
The U.S. Treasury’s Office of Foreign Asset Control (OFAC) sanctioned Ethereum mixer program Tornado Cash in August 2022, and ever since then, Ethereum developers have had to deal with what that means. Some have argued that validators that are not under U.S. jurisdiction do not have to comply with the sanctions. Others are confused about what kinds of blockchain activities are allowed under OFAC’s rules.