Because the Ethereum Merge is one of most highly anticipated events in cryptocurrency, there are bound to be misinformation and rumors. A new blog post by the Ethereum team addresses some of these myths. It will be live in a few more weeks.
Reduced Gas Fees There is no such thing.
When the Ethereum Mainnet merges into the Beacon Chain proof of-stake system, the current proof-of work mechanism will end. Since this mechanism uses so little energy, according to the blog article, Ethereum’s energy consumption will be cut by 99.5%.
But the Ethereum Foundation clarified on Wednesday that the network’s next proof-of-stake temporary upgrade, known as the “Merge,” will not lower gas costs. In relation to:
“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput.”
The Merge claims that energy-intensive mining is unnecessary. It aims at combining the Ethereum mainnet execution layers with its brand new proof-of stake consensus layer, The Beacon Chain. The Merge expects it to arrive in the final quarter or third of 2022. Despite the fact that many traders and investors alike purchased Ether in preparation of the Merge update, some seem to have done so under the mistaken belief that the network’s capacity would increase after the upgrade went live.
Additional Information About the Ethereum Merge
The foundation also assessed the claim that “32 ETH is required to run a node” to be untrue. According to them, there are no limits on the number of individuals who can operate a node. ETH also isn’t required in the traditional sense.
There are no requirements for initial Ether stakes and everyone is permitted to run nodes or sync an Ethereum copy that they have verified. Once the Shanghai upgrade has been completed, it is impossible to withdraw staked Ether. But, liquid ETH will soon be available in the form fee tips. To avoid any liquidity crisis, withdrawing from the validator is rate-limited once it’s launched.
The market capitalization of Ethereum is $225 billion. Source: TradingView
After the Merge, transactions won’t move any faster either. To attract capital, the network’s APR returns are anticipated to climb by 50% after the merger. Client developers are currently developing the Merge with an expected completion date of September 19, in mind.
As compensation for the merger, validators will get fee tips/MEV. These will be paid directly to the mainnet account.
In response to concerns that validator withdrawals would be made in large quantities once they are allowed, the foundation stated that “only six validators may exit per epoch (every 6.4 minutes, or 1350 per day, or only 43,200 ETH per day out of over 10 million ETH staked).”
The rate limit was to be modified based on how much ETH is still staked in order to avoid a mass exodus.