Ethereum (ETH) is about to undergo the most critical upgrade in its history, known as The Merge.
Widely anticipated for longer than 2 years, The Merge is the transition of the Ethereum network from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The Merge is touted as the solution that will make Ethereum much more scalable, reliable and energy-efficient. Here’s what you need to know.
What is The Merge?
The Merge is an update to the Ethereum network. It’s called “The Merge” because the update will merge the existing Ethereum Mainnet, which currently processes all transactions, with a solution called the Beacon Chain, a new transaction processing system that has been running in parallel up until now.
After The Merge, Ethereum transactions will be processed based on a consensus mechanism known as proof-of-stake. In a proof-of-stake system, a group of network participants called validators are responsible for ensuring the accuracy of all transactions. Validators earn ETH for providing their services, and lock up a certain amount of ETH, which can be lost if they behave unethically, giving them an incentive to only prepare and vote on valid transactions as determined by the previous history of the Ethereum blockchain. Because a proof-of-stake solution is based on trust and incentives, as opposed to raw computer power that runs a proof-of-work system, proponents argue that the future of Ethereum will be more accessible, more energy efficient and more scalable. The Merge will be the most high-profile blockchain transition from proof-of-work to proof-of-stake.
When is The Merge scheduled?
The Merge actually consists of 2 unique updates. The first, known as the Bellatrix upgrade, will take place on September 6th. Bellatrix will perform minor updates to the Ethereum consensus layer. A week later, the Paris upgrade will take place on approximately September 15th. This update will assign the new execution layer for processing transactions.
The schedule is approximate because the exact timings of the upgrades are based on a milestone called Terminal Total Difficulty (TTD) which is expected to be reached on approximately September 15th. The exact time can fluctuate based on how quickly Ethereum blocks of transactions are processed and other technical factors.
You can see a live countdown to the block that will trigger The Merge here.
What is Coinsquare doing to prepare for The Merge?
Coinsquare will be fully supporting The Merge. We’re excited to see Ethereum move to a more scalable solution. We’ll work with our custodians and partners to ensure that all our client assets seamlessly transition to the new system without impacting end users.
In preparation for The Merge, Coinsquare will temporarily pause deposits, withdrawals, and trading for Ethereum and ERC-20 tokens on:
- September 6th, 2022, shortly before the Bellatrix consensus layer upgrade
- September 15th, 2022, shortly before the Paris execution layer upgrade
Please refrain from sending Ethereum or any other ERC-20 tokens to Coinsquare during these periods of instability. Deposits, withdrawals and trading will be re-enabled once the upgrade is complete and the network has stabilized.
I hold Ethereum, do I need to do anything?
There is no specific action required for holders of Ethereum or ERC-20 tokens in order to prepare or upgrade during The Merge. The update has been structured to have no impact on Ethereum or ERC-20 token holders.
You don’t need to move, update or upgrade your coins. Anyone who claims to be able to help you claim, merge or move your coins is likely trying to scam you. Stay alert, and always reach out to a trusted contact, like Coinsquare Support, with questions about The Merge.
If Ethereum goes through a fork, how can I claim my new assets?
There is the possibility that a group of developers who prefer the older version of Ethereum will perform a “fork”, essentially creating a second copy of the Ethereum network that does not update, and continues to use the older proof-of-work system. Coinsquare will monitor the potential for a competing version of Ethereum to be created during The Merge.
Any new version of ETH created by a fork will be considered a new asset, and Coinsquare will perform a complete due diligence process before deciding whether to list it. Therefore, forked assets will not automatically be credited to clients in the event of a fork.
Clients may choose to withdraw their ETH balances to their personal wallets to guarantee that they get access to any forked assets. You should do careful research to determine whether your wallet will support the forked asset before you send any transactions to it. If you decide to take these measures, please ensure that you allow sufficient time for the transfer of your ETH and/or ERC-20 tokens to be processed prior to our temporary ETH suspension.
Where can I go to learn more?
We recommend relying on sources that are directly published by the Ethereum core team. Here’s a few of our favorites:
- Ethereum.org is the official domain of the Ethereum community, supported by the Ethereum Foundation
- Wenmerge is a countdown timer for The Merge, run by the Ethereum community based on data provided by the Ethereum core team.
- The Ethereum Blog has more technical explanations about The Merge and what problems it is looking to address.