Ethereum Team Settles Rumors Around Upcoming Merge
The team behind the upcoming Ethereum merge has taken to its website to put to bed rumors regarding what to expect after the merge.
The upcoming merge is predicted by Ethereum co-founder Vitalik Buterin to take place around mid-Sep. 2022, and has attracted a flurry of misinformation, including that transaction fees, will be lowered, which the ethereum community has sought to refute.
When news of the successful merge of the beacon chain consensus layer with the Goerli testnet on Thursday, Aug 11, 2022, broke, the price of ETH, Ethereum’s native token, increased by over 10% to hover around $1900 on Aug 12, 2022. This testnet merge is the last step before the Beacon chain is merged with the execution layer of the Ethereum network to create a proof-of-stake blockchain.
After Buterin announced a merge date, the price of ETH shot up more than 40%.
Ethereum team clarifies prominent rumors, including a reduction in gas fees
The Ethereum network has suffered from scalability problems, where network congestion has raised gas fees. A user pays a gas fee to execute a transaction or a smart contract on Ethereum. An example of a transaction could be minting a non-fungible token on the blockchain. The less congested the network is, the lower the gas fees.
While the upcoming merge will see the Ethereum consensus layer change from proof-of-work to a proof-of-stake system that will not directly impact gas fees, a slight reduction may come later when sharding is introduced. Sharding is splitting a database like Ethereum’s into multiple pieces so that nodes only need to run a shard to be a part of the network. The new consensus layer, the Beacon chain, coordinates the proof-of-stake system by randomly assigning stakers to validate shards.
Stakers lock up ETH on the Ethereum network for a chance to earn annual percentage yields on ETH and validate transactions. Stakers need to lock in a minimum of 32 ETH to become a validator, and can withdraw the ETH when Phase 1.5 of the merge occurs, codenamed “Shanghai.” To put to bed rumors that stakers would begin withdrawing their staked ETH en masse, the developers said that the rate at which validators can exit their staked positions is hard-capped to ensure the network’s security.
Staking rewards will be paid out before the Shanghai upgrade, the team confirmed, and will most likely be around 50% instead of 300%, as was rumored.
Regarding rumors of an increase in transaction speed, developers said that Block time and time to finalization would increase. They said that any change in speed would be mainly unnoticeable to the average user.
Putting to bed rumors that node operators will need to stake 32 ETH, the team confirmed that anyone could run a self-verified node.
Coinbase’s pausing of transactions appears unnecessary
Yesterday, Coinbase announced that it would pause ETH transactions before the merge as a precaution and reinstate some services after that. This measure would be seemingly unnecessary, considering that the developers expect no downtime.
Coinbase competitor Binance said it would support the merge without hinting whether it would be pausing transactions.
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