Everything you need to know about the Ethereum Merge.
Misconceptions debunked.
The merge has a set date
following the successful Goerli Testnet merge, but there are still.
Common misconceptions about what will happen to Ethereum.
Post merge.
The three main that will undergo
a drastic change over the coming weeks and it will merge with the beacon chain
and fully transition into a proof of stake consensus mechanism.
Rather than a proof of work, one. That the current mainnet uses.
Further more the merge will pave the way for crucial future network upgrades.
Including. Sharding for better scalability and.
Reducing energy consumption.
As the activation. Of the merge draws near.
Following the successful implementation of Proof of Stake Only Final Goerli
Testnet currently slated for September 15th of July 2022 People have.
Many questions regarding this. Crucial change to.
Ethereum.
More importantly, there are a few. Misconceptions that need.
To be cleared up, and. There is a lot to understand.
Yet it can be tricky to find a comprehensive answer.
As such, we're going to explore pressing.
Questions and debunk misconceptions about the merge in this video.
To offer clarity. About this major Ethereum event.
And a question we have for. You is how do you think the merge will go?
Are you bullish or bearish? Let us know in the comments below.
So when is the merge exactly?
At the time of this. Video, the merge.
Is scheduled to go into effect on September 15th of 2022.
However, there is always a chance that things may need to be delayed slightly.
The merge itself. Has been delayed for. Years.
The merge will go through several.
Testnet testing phases.
To ensure everything works as. Expected.
On June 8th. Developers completed the merge on.
The Ropsten Testnet the most well-known Testnet.
And following that
on July six, the Testnet merge on Sepolia went live without any major glitches.
The Goerli Testnet,
the third and final one, successfully saw the merge go live on August 11th.
No major technical.
Issues were reported during the Goerli merge.
Much to the delight of Ethereum enthusiasts and ETH rallied 11%.
As a result.
So will Ethereum go offline during the merge?
Like previous network upgrades, the merge will not result in.
Network downtime for Ethereum.
Once the merge hits the required.
Terminal total difficulty, which is the cumulative total mining
power used to validate new blocks.
The consensus rules will.
Automatically switch from. Proof of work to proof of stake.
Therefore, the bottom line is Ethereum will not have any downtime
during this process.
Do I need to do anything as an Ethereum user?
If you're an Ethereum network user or someone who.
Is invested in, if you don't need to undertake any action.
After the merge, the merge is a protocol upgrade.
But not one that impacts the users.
Or holders directly.
Keep your funds where it is.
Today and keep using your wallet as.
Before and.
Maintain LP positions if you have any.
None of those aspects will be changed or affected.
Once the merge occurs.
Although the transition from proof of work to proof of stake is a hard fork.
It changes the.
Core protocol so the entire history of Ethereum will.
Remain intact and immutable.
Funds held in the wallet.
Before the merge will still be there once the network upgrade.
Completes.
There is no need to do anything
but kick back and relax and watch the events unfold.
Unsurprisingly, there will.
Be hackers and scammers trying to.
Trick users into taking action they should not bother.
With or will likely be.
A strong increase in phishing emails, scams and fake emails
asking users to send their ETH. Balance or ERC 20.
Tokens to new incompatible ETH two addresses.
Your best course.
Of action is to ignore all of these, and there will not be a new ETH 2 token
nor an easy to wild stander.
So what if I'm a node.
Operator, staker or developer?
The rules are slightly different for users. Who stake.
ETH by running their own node or operating node.
Infrastructure in any way.
However, these steps are straightforward and is worthwhile.
To check out the merge readiness checklist to.
Ensure all proper steps.
Have been taken.
Run a consensus layer client and an execution
layer client to avoid no longer obtaining execution data before.
The merge.
Finishes.
Authenticate both clients with a shared JWT to enable.
Secure two way.
Communication, said a fee recipient address to receive
earn transaction fee tips.
Failure to complete the first two.
Steps will result in.
Nodes reporting
as offline after the merge until both layers are fully synchronized.
And authenticated. Steps for non validating node.
Operators.
Set up both an execution layer client and consensus layer client, which.
Will work.
In tandem through the new engine API
and set up all the notification between both client three JWT secret.
And steps for Ethereum developers.
Nothing specific, although. The merge will. Change block.
Structure, block.
Timing, opcode changes, disrupt sources of on chain randomness
and change the concept of safe head in finalize blocks.
So now that we have the technical requirements out of the way, it's.
Time to clear up some lingering. Misconceptions for common users and.
ETH holders. Regarding the merge, you.
Have to stake 32 ETH to run any theorem node.
It appears there has been.
A fair bit of miscommunication regarding operating any theorem node after.
The merge pre or post merge.
Anyone is able to run a basic non validating Ethereum network node
without making any commitments to engage in ETH staking.
There has never been an ETH requirement to run a node.
Nor will there ever be.
Once the merge. Passes, users can opt. For two.
Types of nodes mining node slash
validator node the only node type capable of proposing network blocks.
But it requires a resource commitment.
The resources either mining power under a proof of work rules or staked.
In proof of stake.
These nodes
earn protocol rewards for their ongoing support of the Ethereum network.
Traditional node no resource commitment, but who will operate a computer slash
server connected.
To the internet in network 24 seven?
These nodes cannot propose blocks but will.
Listen for new network blocks.
And verify their validity.
These nodes are incredibly valuable to Ethereum
and will enhance its censorship resistance in decentralized aspect.
The 32 ETHE staking requirement applies to only users who
aim to run a validator node under the merge switch to proof of stake.
However, those who prefer to.
Run a non validator node have no financial commitments.
To worry about and furthermore.
Those with less than 32 ether can stake by committing to staking.
Providers or pools.
So will the merge lower transaction fees.
Contrary to what most people think, the merge will not alter Ethereum's gas fees.
It does not expand the network's capacity, nor does it provide.
More efficient. Transaction. Structures.
It is a change of consensus mechanism
and will pave the way for future transaction fee improvements.
But lower gas.
Fees will not come courtesy of the merge.
To understand why, you'd first have to understand how Ethereum's gas fees.
Work there result of network demand versus network capacity.
As the network reaches.
Maximum capacity in demand and remains high, gas fees will go up.
However, lower fees may occur.
When demand stays the.
Same or decreases in network capacity.
Does not max out.
The merge does not influence this correlation.
Although the future upgrades may offer improvements, this switch from.
Proof of stake will lay the foundation for sharding and.
Higher throughput, and those upgrades will not.
Rule out any time soon though, as there is no official timeline
for their main activation.
However many players. Are building in.
The Layer two or L2 rollup space.
With many developments that promise cheaper
and faster network transactions within the Ethereum ecosystem.
Will the merge. Make transactions.
Faster? The merge will. Introduce some minor changes to the.
Ethereum network and its. Transactions, but.
There will be. No noticeable speed improvements.
Proof of stake will enable new transaction,
finality, concept and bundle blocks into epics every 6.4 minutes over
that will not speed up transactions as the finality process.
Will be roughly on par with how many proof of work requirements blocks.
Are needed. For DApps Today.
Can I withdraw staked ETH. Once the merge happens?
This is another misconception that may leave some users dismayed.
While users have been able to engage in each staking on the beacon chain.
Before the merge, they.
Will not be able to draw their stake once the merge happens.
Instead, this process will be enabled in a.
Future network upgrade. Dubbed it Shanghai.
The Shanghai upgrade is the first major upgrade after the merge, although.
This may be another 12. Months or longer.
To be activated on the mainnet.
Moreover, that. Applies to staked ETH Staking.
Rewards and newly issued ETH balances immediately after the merge completes.
All funds will remain on the beacon
chain and are unable to be withdrawn until the Shanghai upgrade is live.
Will validators. Receive.
Liquid. ETH rewards before Shanghai? Yes.
They will. Receive free tips.
And MEV or minor
extracted value in their mainnet accounts with funds being available immediately.
The Ethereum protocol.
Will issue ETH.
As a reward to validators who.
Help. Establish network consensus.
Those funds are locked on the beacon chain where validators have unique addresses.
Holding their rewards. And staked over the ETH on the mainnet.
When users complete transactions cover gas fees into validator
is on the execution layer and not on the beacon chain.
Keep in mind, validators will only receive these earnings
if they designate a valid fee recipient address in their client software.
So will Stakers. Bail.
Once withdrawals are available,
there will be an influx of ETH liquidity once the Shanghai upgrade goes live.
All stakers will be able to claim the rewards and withdraw their.
Staked ETH if they. No longer wish to support the network.
However, only a certain number of network validators
can withdraw their network support.
Such security measures.
Are essential and ensure the Ethereum.
Network will remain. Operational.
The Shanghai.
Upgrade will offer an.
Incentive to withdraw staking balances above 32 ETH
by validators and as those funds will not contribute additional yield.
Some may even hold their node altogether and reclaim their entire balance.
Or commit more funds to.
Their staking part. To earn more yield.
The Ethereum Protocol. Limits full.
Validator exits to six per epoch or 1350 per day.
That also means validators
can remove a maximum of 43,200 ETH from staking per day and.
With over. 10 million ETH engaged in staking today.
Those numbers are not.
Set in stone as they will vary based on the overall amount of ETH staked
but is sufficient to prevent everyone from bailing simultaneously.
Will the staking API. Increase after the merge?
The Ethereum developers purposefully opt for a variable staking approach.
It enables users to determine how much they want to be paid to.
Secure the network.
Should validators decide to withdraw their node, the.
EPR may gradually increase for those who.
Remain committed to staking.
It is unlikely
that there will be a gradual EPR increase, but one should not expect a.
Ludicrous result either.
Some people project a 200% increase, but that will likely be closer to 50% or less.
Post-merger.
The EPR will.
Likely go
up and transaction fees will start flowing to validators instead of miners.
Those fees are in line with network activity
during the proposed block by the validator, resulting in varying income.
Keep in mind a 50% increase in API does not mean that users.
Will earn over 50% of their staked balances and.
Rewards.
It means that the current EPR will increase.
By 50% and rise to roughly 7%.
Or slightly lower, which is still a very appealing rate.
During the early.
Days of planning.
The merge.
There were rumors. Of ETH2 being created.
Some people actually. Interpreted.
This as a new. Network and.
Currency, although neither of those will actually exist.
Moreover, the Ethereum developers.
Have stopped using the term ETH two.
As the merge draws closer.
To avoid any unnecessary confusion on that front.
While it is true that there is an ETH
one, the main net and some term is two as the beacon chain.
It will accumulate in the merge and become one network.
That network will remain the.
Ethereum remnant and it will have all the features of the beacon chain
and there is still a mention of ETH one and ETH two among.
Developers. But that applies to the execution layer.
For. Transactions.
So ETH one and the consensus layer.
For proof. Of stake consensus is to keep in mind that these.
Are not separate networks, but rather two.
Facets of the ether amenity that.
Serve a dedicated purpose.
When will Ethereum enable sharding?
The initial plan was to enable sharding ahead of the. Merge.
Which ultimately did not prove possible.
However, Ethereum has seen.
Various L2
scaling solutions pop up to alleviate some of its scaling concerns that enabled.
The developers to prioritize.
The consensus change to proof.
Of stake reducing the network's energy.
Consumption significantly and sharding is.
Still part of the long term roadmap.
According to co-founder Vitalik Buterin.
Although they will not implement it soon.
Instead, the developers will.
Continue to look for the most optimal way to.
Distribute stored compress.
Call data from rollup contracts to enable network capacity to grow exponentially.
Put simply, that translates to faster and.
Cheaper transactions for users. The switch to proof of stake.
Is necessary to continue exploring viable opportunities on that.
Front.
Sharding is not part of the Shanghai upgrade either, meaning that it will take
at least 12 months before sharding will hit the ETH remaining.
In reality, it will likely take. Two years or longer.
Although the timeline is always subject to change,
what other misconceptions are out there for the merge?
Let us know in the comments down below.