The evolution of blockchain technology has reached a pivotal juncture, and at the heart of this transformation stands Ethereum — the most influential smart contract platform in the digital world. As we approach one of its most anticipated milestones, the "Shanghai Upgrade", it's essential to reflect on how far Ethereum has come, the vision behind its development, and what lies ahead for decentralized infrastructure.
This moment isn't just another technical update — it represents a profound shift in scalability, usability, and long-term sustainability. To understand its full significance, we must revisit key chapters in Ethereum’s journey, including the foundational role played by early supporters and global developer communities.
The Merge: A Historic Leap Forward
On September 15, 2022, Ethereum achieved "The Merge" — a landmark transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This upgrade marked the third major milestone in Ethereum’s history, following its whitepaper release in 2013 and mainnet launch in 2015.
With The Merge:
- Energy consumption dropped by 99%
- New ETH issuance was reduced by approximately 90%
- Network security remained robust while paving the way for future scalability improvements
Importantly, The Merge laid the groundwork for enhanced performance. With upcoming upgrades like sharding and Layer 2 solutions, gas fees are expected to approach zero over time. In the next three years, Ethereum aims to support 100,000 transactions per second (TPS) — scaling up to 10 million TPS within a decade.
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Despite these advances, full functionality — particularly staking withdrawals — required a subsequent upgrade. That crucial next step? The Shanghai Upgrade.
Why "Shanghai"? The Origin of a Name
Ethereum often names major upgrades after cities that have hosted its DevCon (Developer Conference) events. After DevCon1 in Berlin and DevCon2 in London, the third major gathering — DevCon2 (retroactively named due to versioning conventions) — took place in Shanghai in September 2016.
Hosted at the Mandarin Oriental Pudong, the event drew nearly 1,000 attendees, with 90% traveling from overseas. For many Chinese tech journalists and developers, it felt surreal — as if they had stepped into a European or American tech summit. One reporter famously tweeted: "Walking into the venue, seeing mostly foreign faces, I thought I was in Silicon Valley."
This event was made possible through the efforts of Wanxiang Blockchain Labs, which fully sponsored and facilitated the conference. It was more than just logistics — it symbolized China’s growing engagement with global blockchain innovation.
From that point forward, Ethereum adopted a tradition: name core protocol upgrades after DevCon host cities. Hence, the post-Merge upgrade enabling staking withdrawals became known as the "Shanghai Upgrade."
Early Support: How Wanxiang Helped Shape Ethereum
Back in December 2014, during the Sanya International Financial Forum, I delivered a presentation focused on Ethereum — then only a year old. At the time, both Bitcoin and Ethereum were considered fringe topics in mainstream finance. Yet, that session sparked interest among early Chinese blockchain pioneers.
Shortly after, I received a WeChat friend request from someone sitting with Vitalik Buterin at Incheon Airport in South Korea. That introduction — facilitated by investor Shen Bo — marked the beginning of a deeper collaboration.
Vitalik visited Shanghai multiple times between 2015 and 2016. He stayed with Shen Bo and immersed himself in local culture. Despite minimal personal needs, he had one notable passion: cats. During a trip to Hong Kong, I found a heavy photography book dedicated entirely to cats and gifted it to him — a small token of friendship during his time abroad.
Our discussions centered on how Wanxiang could support Ethereum’s development. In April 2015, tensions arose within the Ethereum community over funding concerns. There were doubts about whether the foundation could sustain operations until mainnet launch.
Recognizing an opportunity to contribute meaningfully, I proposed that Wanxiang Blockchain Labs donate $500,000 to the Ethereum Foundation — with potential for continued support. Given regulatory and structural constraints, the funds were transferred via Wanxiang’s overseas entity, while all blockchain cooperation would be managed by the newly forming lab.
This gesture reassured developers and stabilized community confidence. Vitalik publicly acknowledged the donation, emphasizing the importance of institutional backing for open-source infrastructure.
Building an Ecosystem: From Summit to Hackathon
The donation catalyzed Wanxiang’s broader blockchain strategy:
- Wanxiang Blockchain Labs officially launched in late 2015
- The first Wanxiang Blockchain Summit brought together global experts in Shanghai
- Distributed Capital, Asia’s first dedicated blockchain fund, was established
- A global blockchain startup grant program was announced
- Educational workshops trained hundreds of Chinese developers
In January 2016, we hosted China’s first blockchain hackathon, co-organized with Deloitte and supported by three Ethereum Foundation engineers — including Vitalik himself.
One winning team included a high school student who flew from Italy to compete. After winning first prize, he asked to join our team full-time. Though we encouraged him to return home and finish school, he later co-founded a successful blockchain project in Europe — a reminder that young innovators drive disruption.
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Looking Ahead: Ethereum as the Internet’s Next Protocol Layer
Today’s multi-chain landscape resembles the pre-TCP/IP era of the internet — fragmented, incompatible, and inefficient. Just as TCP/IP unified communication protocols, market forces will likely converge blockchain standards around a unified stack.
Ethereum is uniquely positioned to become that foundation:
- From L0 (networking/storage) to L1 (base layer) and L2/L3 scaling solutions
- With performance targets reaching 10 million TPS
- Supporting seamless interoperability across chains
Other public blockchains may eventually integrate as sidechains, rollups, or shards of Ethereum — creating a cohesive, scalable ecosystem.
Frequently Asked Questions (FAQ)
What is the Shanghai Upgrade?
The Shanghai Upgrade is a critical Ethereum network update that enabled withdrawals from staked ETH, allowing users to access rewards and principal after participating in PoS consensus.
When did the Shanghai Upgrade happen?
It went live on April 12, 2023, marking the first major upgrade after The Merge.
Why is it called "Shanghai"?
Ethereum names major upgrades after cities that have hosted DevCon events. The 2016 DevCon2 in Shanghai inspired the name.
Did The Merge reduce gas fees?
Not immediately. Gas fees are primarily reduced through Layer 2 scaling and sharding, which are part of future roadmap phases.
Can Ethereum really reach 10 million TPS?
According to Ethereum Foundation roadmaps, yes — through layered architecture combining rollups, sharding, and optimized execution environments over the next decade.
How did early support impact Ethereum’s growth?
Early institutional backing — such as Wanxiang’s donation — helped stabilize development efforts and build trust within the global developer community.
Final Thoughts: A Unified Digital Future
As we stand at this crossroads of technological transformation, Ethereum continues to evolve beyond a cryptocurrency into a foundational layer for digital society — powering DeFi, NFTs, DAOs, and future innovations yet unnamed.
The Shanghai Upgrade wasn't just about unlocking staked assets; it was about fulfilling promises made years ago — to decentralization, sustainability, and global participation.
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With visionary contributors, international collaboration, and relentless technical progress, Ethereum is building not just a blockchain — but a new internet protocol stack for the next generation.