What are the main contents of the Ethereum Shanghai Upgrade?

Okay, no problem. Let's talk in plain language about what Ethereum's "Shanghai Upgrade" is all about.

Ethereum's Shanghai Upgrade: Finally, Staked ETH Can Be Withdrawn!

Simply put, the most core and important aspect of the Shanghai Upgrade is just one thing: enabling withdrawals for staked ETH.

You can think of it like this: you deposited a fixed amount of money in a bank with super high interest, but previously the bank's rule was "you can deposit, but you can't withdraw." The Shanghai Upgrade is like the bank finally opening a withdrawal window, telling you: "Hey, the money you deposited earlier, plus all the interest earned over the years, can now be withdrawn at any time!"

Let me break it down for you, and you'll understand completely.

Core of the Core: Enabling ETH Staking Withdrawals (EIP-4895)

This is the soul of the Shanghai Upgrade. Before it, to transition from PoW (Proof of Work, i.e., mining with machines) to PoS (Proof of Stake, staking ETH to secure the network), Ethereum encouraged people to stake their ETH to become validators.

Before the Upgrade: Staking ETH was like buying a "one-way ticket." You locked at least 32 ETH into the system, earning interest (staking rewards), but neither these ETH nor the earned interest could be moved. When could you withdraw them? No one knew; you just had to wait for a subsequent upgrade. This deterred many, as the liquidity of funds was too poor.
After the Shanghai Upgrade: This "one-way ticket" became a "round-trip ticket." It officially activated the withdrawal functionality, allowing all stakers to withdraw their principal and rewards. This significantly reduced the risk of staking, encouraging more people to participate.

Withdrawals mainly fall into two categories:

1. Partial Withdrawals / Skimming

What is this? This refers to withdrawing only the "interest" (i.e., the rewards portion) generated from your staking.
How does it work? It's fully automatic! You don't have to do anything. The system periodically scans all validators, and if your balance exceeds 32 ETH, the excess amount (i.e., the rewards) will be automatically sent to your wallet address. It's just like your fixed deposit interest being automatically credited to your bank card when due – very convenient.

2. Full Withdrawals

What is this? This is when you want to "retire" and stop being a validator, withdrawing your initial 32 ETH principal and all accumulated rewards.
How does it work? This requires you to actively initiate it. You need to send an "exit" signal to the network. Once the exit is successful, all your assets (32 ETH + all accumulated rewards) will be returned to your wallet. This is equivalent to closing a bank account and withdrawing both principal and interest.

Are Withdrawals a "Floodgate Opening"? No!

At the time, many worried that once withdrawals were enabled, everyone would rush to withdraw their ETH and dump it on the market, causing a sharp price drop?

The answer is: No, they won't.

Ethereum's designers had already accounted for this. The system designed a withdrawal queue.

Partial Withdrawals: These are processed quickly because the amounts are small.
Full Withdrawals: These have quantity limits. The network can only process a limited number of "full withdrawal" requests per epoch (approximately 12 seconds). If many people want to withdraw, they'll have to queue. It's like a bank with only one teller window; everyone has to be served in order, which prevents a sudden "bank run" risk and ensures the stability of the entire system.

Besides Withdrawals, There Are Also Some "Minor Optimizations"

While withdrawals are definitely the main focus, the Shanghai Upgrade also bundled in some other technical improvements (EIPs), primarily aimed at reducing Gas fees (transaction costs) for developers building applications on Ethereum.

You can think of it as, while building a "withdrawal highway," some of the smaller roads next to it were also optimized, making it more "fuel-efficient" for developers to "drive." For regular users, these might not be noticeable, but they are highly beneficial for the long-term development of the entire ecosystem.

To Summarize

99% of the significance of Ethereum's Shanghai Upgrade lies in enabling free redemption of staked ETH.

It resolved the biggest concern for stakers, making Ethereum's PoS mechanism more complete and robust. This is like a shot in the arm for the entire system, transforming ETH staking from a "one-way" investment into a flexible, sustainable financial management method, which is a massive positive for Ethereum's long-term value and network security.