Ethereum Shanghai upgrade refers to a collection of improvements and updates on the Ethereum network aimed at improving the entire performance, security, and functionality of the Ethereum Blockchain. Overall, the Ethereum network seeks to upgrade the Ethereum blockchain. The network is undergoing a series of upgrades with the latest being the Shanghai upgrade.
Ethereum has launched two public testnets with respect to the upgrade; the first testnet was launched in October 2022, and the second testnet was launched in February 2023 and is known as Sepolia. The Sepolia Testnet was designed to test withdrawals similar to those that will happen on the main Ethereum blockchain. The Shanghai upgrade when completed on Ethereum will enable withdrawal of staked ETH; validators can only stake ETH to the Beacon Chain to support proof of stake on Ethereum but not withdraw it. However, the upgrade is expected to enable these withdrawals.
Some key changes from the upgrade include:
- Implementation of the Ethereum Improvement Proposal (EIP) 1559 aimed at achieving a new fee mechanism.
- Implementation of EIP-3198 for minimizing the impact of network congestion in the gas fee market.
- Implementation of EIP-3529 for reducing the cost of processing
As the Ethereum network is almost set to process staked ETH withdrawal with the final upgrade, this article highlights ETH Liquidity Staking tokens with likely good potentials to explore:
Ten (10) ETH Liquidity Staking Tokens to Explore
LDO is the Lido DAO token with a current market cap of $2,610,351,758. It has 5,467,792 staked ETH with an APY of 4.8% ams leads in ETH-based LSD; additionally, LDO has the highest TVL and deepest liquidity. Lido DAO is a Decentralized Autonomous Organization that decides on the key parameters of liquid staking protocols leveraging the governance token (LDO).
RPL is the Rocket pool token with tags on DeFi and Liquid staking. Coinbase Ventures has a membership stake in the RPL DAO and is one of the key investors. RPL has a market cap of $907,024,886, a circulating supply of 19,113,413 RPL, and about 410,000 staked ETH on Rocket Pool.
Frax Shares (FXS) is the governance token of the Frax Protocol. The protocol’s second token FRAX is an algorithmic stablecoin while the FXS accrues fees, seigniorage revenue, and excess collateral value. FXS is hard capped to 100 million and has a current market cap of $877,448,093. The Frax Protocol stablecoin FRAX is tagged as one of the good-to-do algorithmic stablecoins from research.
ANKR is the Ankr utility and governance token, a decentralized platform that provides blockchain infrastructure and has a partnership with Microsoft. The Ankr Blockchain-provided infrastructure helps drive the growth of the crypto economy while powering multi-chain tools for Web3 users. ANKR has a current market cap of $387,124,072 and a circulating supply of 9,662,899,378 ANKR.
YFI is the Yearn.finance token, an aggregator service for DeFi investors. It is a platform for liquidity provision and yields farming strategies. Yearn.finance has over 66,000 staked ETH.
ssv.network is a decentralized staking infrastructure that enables the distributed operation of an Ethereum validator, that is, it provides the infrastructure for building secure Ethereum staking applications. SSV has a circulating supply of 10,000,000 and a $427,103,828 market cap.
StaFi is referred to as the first DeFi protocol unlocking the liquidity of staked assets. Users can stake Proof of Stake (PoS) tokens through StaFi and receive rTokens in return, a synthetic derivative issued by StarFi. The StarFi token, FIS, current CoinMarketCap ranking is #451, with a live market cap of $45,861,129. Also, it has a circulating supply of 60,452,000 FIS and a maximum supply of 114,911,733 FIS.
Research shows that the Trancess token, CHESS, is the most searched LSD coin in Hong Kong and a yield-enhancing asset tracker. It has approximately 2000 ETH staked and is backed by Binance. CHESS has a live market cap of $39,980,170 and a circulating supply of 115,548,472 CHESS, with a maximum supply of 300,000,000 CHESS.
pSTAKE is a liquid staking platform and has a partnership with a former Binance custody entity, Ceffu Global. PSTAKE token has a maximum supply of 50,000,000 and is on the watchlist of more than 8000 crypto natives on Coinmarketcap.
SWISE is a StakeWise token, a liquid Ethereum staking protocol that unlocks the earning potential of ETH2 for DeFi players. The protocol is non-custodial and tokenizes stakers’ rewards separately from the deposits, which allows users to apply staked ETH capital in DeFi or reinvest. There are about 85,000 staked ETH on StakeWise.
The Ethereum Shanghai upgrade could shake up the market impacting Ethereum Liquidity staking tokens positively. However, it should be noted that the crypto market is volatile and a high-risk asset, hence, should be engaged based on DYOR and crypto education.
The tokens highlighted in this article have different utilities, however, similarly, they are DeFi and DAO tagged. This is not an endorsement of these tokens. Ensure to do your research before making any investment decisions. Five (5) other ETH Liquidity staking tokens to explore include $SD, $JPEG, $GEAR, $BNC, and Ether.FI.
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