Shapella Fork Meaning

Dec 14, 2023 | Updated Dec 14, 2023

The Shapella fork is the combination of two major Ethereum network upgrades (Shanghai and Capella upgrades) that occurred simultaneously. Together, these upgrades allowed users to withdraw their staked ETH on the network.

What is Shapella Fork?

The Shapella fork is the combination of two major simultaneous upgrades to the Ethereum network, Shanghai and Capella.

The Shanghai upgrade made changes Ethereum’s to the execution layer, while the Capella upgrade included changes made to the consensus layer. Capella took place immediately after the Shanghai upgrade, and together, they enabled Ethereum validators to withdraw their staked Ether.

Shanghai + Capella = “Shapella”.

Why did the two upgrades happen simultaneously?

Allowing withdrawals would mean that users could move their staked ETH to their crypto wallets. But staked ETH is locked on the consensus layer while user wallets are on the execution layer. Hence, a simultaneous upgrade enabled a seamless transition of staked ETH between the layers.

How Does the Shapella Fork Fit into The Merge?

The Merge, a major and multi-step upgrade to the Ethereum network, shifted the network from a proof-of-work (PoW) algorithm to a more energy-efficient proof-of-stake (PoS) consensus mechanism. Now,e validators can stake ETH for the chance to confirm transactions. However, since the transition, ETH staking functioned as a one-way process. Users could stake their funds, but could not withdraw the deposits or staking rewards. These issues led to the Shapella fork.

The Shapella fork rolled out on the Ethereum mainnet in April 2023. The main feature in the update is the EIP-4895, which allows validators to withdraw their locked ETH from the Beacon Chain (consensus layer). EIP-4895 moved the staked Ether from the consensus layer to the execution layer, also known as the Ethereum Virtual Machine (EVM), to facilitate validator staking withdrawal.

The Shapella fork also introduced partial and complete stake withdrawals. In partial withdrawals, validators can request to withdraw the staking rewards only. In full withdrawals, validators can withdraw their original stake plus the accrued staking rewards.

For example, if a validator staked 32 ETH and earned 5 ETH as a staking reward, they can request to withdraw 5 ETH (partial withdrawal) or 37 ETH (full withdrawal).

The Shapella upgrade completes Ethereum’s transition to a PoS blockchain. Other Ethereum Improvement Proposals (EIPs) in the upgrade include EIP-3651, EIP-3855, EIP-3860, EIP-4895, and EIP-6049.