10 questions to keep you on top of the Ethereum Merge?

ethereum merge

wiredshut2

August 18, 2022

The Merge is set to happen on September 19, following the successful Goerli testnet Merge — but some questions remain in users’ minds about what will happen to Ethereum post-Merge. Here’s all you need to know about “The Merge”.

  1. What is the Ethereum Merge?

 The Merge is the fusion of the existing Ethereum Mainnet with its new Proof-of-stake consensus layer, the Beacon Chain. It eliminates energy-intensive Proof-of-Work mining and secures the network using staked ETH. The new network is expected to be more scalable, secure and sustainable.

Click here to read an in-depth analysis of the Ethereum Merge

  1. Is there an ETH2 token?

 There were speculations of “ETH2” creation in the early stages of The Merge preparation. Although neither of those things will exist, several individuals mistook this for a new network and currency. To minimise any other misunderstanding as The Merge approaches, the Ethereum developers have also ceased using the phrase “ETH2”.

  1. What should ETH holders do to prepare for the Merge?

 Ethereum users or ETH holders do not need to take action with their funds or wallets before The Merge.

However, users should be alert for scammers trying to make a buck during the transition. Users are advised not to send their ETH to third parties to “upgrade to ETH2.” There is no “ETH2” token, and your money is safe without further action.

  1. What steps should Node Operators, Stakers or Developers take to prepapre for The Merge?

Steps to running your node as an ETH staker:

  • Run a consensus layer client and an execution layer client to ensure that execution data is still available after The Merge is complete.
  • To enable secure two-way communication, use a shared JASON Web Token (JWT) to authenticate both clients.
  • Establish a fee recipient address to receive transaction fee tips you have earned.
  • Nodes will report as “offline” after The Merge if the first two steps are skipped until both layers are entirely synchronised and authenticated.

What non-validating node operators should do:

  • Create a client for the consensus and execution layers that will cooperate using the new Engine API.
  • Create a JWT secret to enable authentication between the two clients.

What Ethereum developers should do:

The Merge will alter the notions of safe head and finalised blocks as well as block timing, opcode changes, sources of on-chain randomness, and block structure.

  1. Do I have to stake 32 ETH To run an Ethereum node?

There seems to be a fair bit of misinformation about operating an Ethereum node. Anyone can run a basic non-validating Ethereum network node pre- or post-Merge without requiring to stake ETH. There has never been an ETH requirement to run a node, nor will there be once The Merge is complete.

  1. Will The Merge lower transaction fees?

Contrary to what most people believe, The Merge will not lower the gas fee because it only modifies the consensus procedure, not increases network capacity. According to Ethereum’s official website, gas fee results from network demand and capacity correlation. While switching from proof-of-work to proof-of-stake for consensus, The Merge does not significantly change any factors that directly affect network performance or capacity.

  1. Will The Merge make transactions faster?

Transactions are not expected to be faster after THE Merge. However, slight improvements may be seen in the speed, measured by time included in the block and time finalise. Both of them will not change significantly.

  1. Can I withdraw staked ETH once the merge happens?

Users have been allowed to stake ETH on the Beacon Chain up to The Merge, but they won’t be able to withdraw their stake.

As an alternative, the procedure will be made available in an upcoming network update called “Shanghai.” Although it would take a year or more for the Shanghai update to be enabled on the Mainnet, it is the first significant improvement since The Merge.

  1. Will the staking APR increase after The Merge?

After the merger, the APR for stakers is anticipated to rise. The APR may increase gradually, but one shouldn’t expect absurd outcomes. Some predict the growth of 200%, but it will probably be closer to 50% or less. But remember that a 50% rise in APR does not mean users will earn a 50% reward on their staked amount. It indicates that the present APR will grow by 50% ( to almost 7%) compared to the current level.

  1. Will The Merge result in a downtime of the chain?

Ethereum’s website asserts that strong measures have been taken to ensure zero downtime while transitioning from Proof of Work to Proof of Stake.