The long-awaited Ethereum update, The Merge, is scheduled for September 15, 2022. The Ethereum team has been working on it for several years, initially introducing the Proof of Stake (PoS) Beacon Chain.
Now, when the Beacon Chain finally merges into the mainnet, the PoS consensus algorithm will completely replace Proof of Work (PoW). Consequently, Ethereum’s energy consumption will be reduced by over 99%.
What else does The Merge mean for the network?
Miners will no longer exist, giving way to validators who confirm new transactions and get ETH rewards. To become one, you need to stake 32 ETH. Those who have staked ETH on the Beacon Chain, will not be able to withdraw the assets for another 6 to 12 months but will start receiving their first rewards once The Merge goes live.
The staking profit is expected to increase, allowing validators to earn around 5.3%-7.3% in APR compared to the current 4-4,5%. As of now, the Beacon Chain counts over 420,000 validators who locked 13,47 million ETH. A large number of validators is necessary to keep the chain decentralized.
Transaction Speed and Gas Fees
Contrary to common misconception, the Merge will not make Ethereum more scalable. Transaction speed will not increase, and gas fees will not be reduced just yet. The scaling issue will be addressed in the next update that will introduce sharding.
The opinions on the future of ETH price differ. While some say that it is likely to continue its upwards trend in the long run, others hope the price will soon go up to $3,000 – $5,000. Nevertheless, most experts agree that The Merge will have a massive effect on the cryptocurrency market.
Institutional investors embracing ETH can also drive price growth, and some research shows that the number of ETH whales has already increased.
HitBTC and The Merge: Important Info
- Spot and futures trading on HitBTC will be available during and after The Merge for ERC20 tokens and ETH.
- ETH and ERC20 token deposits and withdrawals will be suspended 20 minutes before The Merge and will be opened as soon as the network is stable. We expect no longer than 2 hours of downtime.
- HitBTC will support The Merge, and you will not need to swap your tokens: the ticker ETH now belongs to ETHPoS. We will support Proof of Work (ETHPoW) if it survives.
- Dedicated to providing continuous trading, HitBTC will not halt or settle ETH futures prior to The Merge.
- The ERC-20 tokens are likely to be transferred to the new PoS chain, but it is worth keeping an eye on the official announcements.
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