BGD. Technical analysis Aave <> Shanghai/Capella Ethereum upgrade

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The upcoming Ethereum Shanghai/Capella network upgrade, which includes changes to both consensus and execution layers, is not expected to significantly impact the Aave protocol or its associated assets like stETH, wstETH, cbETH, and rETH. While the upgrade introduces Ethereum Improvement Proposals (EIPs) and changes to Ethereum Object Format (EOF) contracts, these will only affect newly deployed contracts and not existing ones, ensuring Aave's current operations remain unaffected.

The Aave community recently engaged in a detailed discussion about the upcoming Ethereum Shanghai/Capella network upgrade. Bgdlabs conducted a comprehensive technical analysis, concluding that the upgrade should not affect Aave systems1. The Ethereum network operates in two layers: consensus and execution. The Shanghai and Capella upgrades, planned to occur simultaneously, will affect these layers respectively1.

The Aave protocol, which runs in the Ethereum Virtual Machine (EVM), is expected to be unaffected by the consensus layer upgrade (Capella). This upgrade introduces a significant change for Ethereum post-merge, enabling withdrawals of ETH staked for validation. However, this doesn't have any technical impact on Aave. The Aave protocol also deals with assets representing staked ETH on the EVM, like stETH, wstETH, cbETH, and rETH. After checking with the respective teams behind these assets, it was concluded that there should be no breaking affecting the Aave protocol1.

The Shanghai upgrade (execution layer) includes multiple Ethereum Improvement Proposals (EIPs) focused on EVM optimizations and better structuring of bytecode. These should not affect the Aave protocol. The EIPs include the introduction of EOF (Ethereum Object Format) contracts, basic definition and implementation of the EOF contracts, extra validations of bytecode, adding new "jump" opcodes, adding the concept of "sections" within the bytecode, and additional validations for EOF contracts. Aave is not affected by any of these EIPs, as only newly deployed contracts will respect EOF1.

Bgdlabs proposed several changes, including the addition of a new opcode to push the value 0 into the EVM stack, which would make it cheaper in terms of gas. This change would not affect running contracts but would make those deployed post-upgrade more efficient1. Bgdlabs also suggested adding size and gas limits to initcode (contract constructor) to make its validation stricter. This change would not affect running contracts but would make those deployed post-upgrade more efficient1. Bgdlabs concluded that from a technical perspective, the Aave smart contracts will not be affected by Shanghai/Capella. They will continue to monitor the programmed upgrades of the ETH LSTs systems to avoid any unexpected behavior1.

MathisGD thanked Bgdlabs for the details and added that only newly deployed contracts starting with the EOF header are affected. This is because the Aave protocol deploys new contracts when creating new markets2. Bgdlabs agreed with MathisGD's clarification and added that if the current Solidity codebase of Aave were compiled and deployed again, the post-upgrade EIPs would apply to the new contracts, most probably slightly changing the to-be-deployed bytecode3.

In conclusion, the upcoming Ethereum Shanghai/Capella network upgrade is not expected to have any significant impact on the Aave protocol. The community will continue to monitor the situation to avoid any unexpected behavior.

Posted 10 months ago

Last reply 10 months ago

Summary updated 2 months ago

Last updated 06/12 00:43