DEVELOPMENT
An important update to the Ethereum network, The Merge, will take place in the coming days.
With The Merge, the Ethereum network will transition from its current Proof-of-Work consensus mechanism to the Proof-of-Stake model, which should be faster and more energy efficient.
Moving the second-largest blockchain from one system to another is an incredibly complex multi-step process. It is important to weigh each decision carefully.
The exact completion date of The Merge phase is constantly changing – you can follow the changes here.
Current values (date/time):
September 15, 02:58 UTC 2022.
Completing The Merge Stage
Before completing The Merge stage, there are some steps you need to take:
- Add a Beacon Chain (Proof-of-Stake consensus layer).
- Remove the Proof-of-Work consensus layer.
- Merge Beacon Chain (Proof-of-Stake consensus layer) with the main Ethereum network.
What is a Beacon Chain?
The Beacon Chain is a fully independent, decentralized network running in parallel with the core Ethereum network that uses the Proof-of-Stake consensus mechanism instead of Ethereum’s current Proof-of-Work consensus mechanism.
The transition of the Beacon Chain began on December 1, 2020, when the one-way bridge began converting the Proof-of-Stake chain to the Proof-of-Stake chain and began accepting deposits.
So far, Beacon Chain has not experienced any downtime or network failures.
What is The Merge?
The Merge is a planned update to the Ethereum network that removes the Proof-of-Work consensus layer and merges the Beacon Chain Proof-of-Stake network with the current core Ethereum network.
The Merge will primarily focus on updating the consensus mechanism and bringing it in line with its original mission: moving from proof-of-work to proof-of-share, verifying transactions on the blockchain, and adding new blocks.
During the merge, the consensus level is updated and the data level remains unchanged.
The Merge phase is expected to be completed on September 15, 2022.
After the completion of The Merge phase, the Ethereum network will only be 55% ready. There is a lot of work ahead!
Ethereum after The Merge: What happens next?
The Surge, Verge, Purge, and Splurge stages will continue to make the Ethereum network more scalable and secure.
The Surge: Scaling Ethereum
This phase is expected to introduce sharding into Ethereum. The Surge will divide the entire Ethereum network into smaller pieces, known as “shards,” which will increase the scalability of the network.
Sharding breaks up data in the same blockchain, essentially creating multiple mini-blockchains. This becomes much easier to do when the protocol moves to share proof.
Ethereum will then seek to create a physically separated system of 64 linked databases.
Ethereum developers are also looking to expand scaling potential by introducing zero-disclosure convolutions (ZK-Rollups). Zero-disclosure swaps execute transactions outside of Ethereum’s base layer (L1) and then publish data to the L1 layer, allowing it to take advantage of Ethereum’s core security chain.
Currently, there are two types of convolutions:
- optimistic convolutions, which assume that transactions are valid for a period of time and are executed in L2 networks before being transmitted back to the Ethereum base layer (L1), and
- Zero-Rollups (ZK-Rollups), which run transactions offline and then send validity confirmation to the Ethereum base layer (L1).
In general, zero-disclosure shrinkwraps (ZK-Rollups) have some computational advantages over optimistic shrinkwraps, given that they would have to provide proof that the transaction is valid, rather than a period of time to accept or reject the transaction.
For a while, optimistic swaps seemed like the ideal solution for scaling the Ethereum network, but with zero-disclosure swaps on the way and the sharding process starting sometime in 2023, Ethereum has a lot of room to make it more scalable.
The Verge: optimization and node size reduction
The next phase will introduce the Verkle tree, which will also solve the scalability problem.
The Verkle tree is “a powerful update to Merkle’s proofs, allowing for much smaller proofs.”
The Verge will optimize storage and reduce node sizes. Ultimately, it will make Ethereum more scalable.
Essentially, the Verkle tree will allow a large amount of data to be stored by showing a short proof of any part of that data, which in turn will be verified by someone who only has the root of the tree. This process would make the proofs much more efficient.
The Verkle tree is still a new idea and is still not as widely known or used as other cryptographic solutions.
So while The Surge will deal with sharding and convolution, The Verge stage will then affect how the network handles scalability and proofs for Ethereum.
The Purge: 100,000 transactions per second
The Purge phase aims to reduce or “purge” backup historical data.
Reducing the amount of historical data will make the blockchain validation process more efficient for validators under the new Proof-of-Stake consensus mechanism.
This should minimize network congestion and allow many more transactions to be processed on the blockchain.
By the end of this phase, Ethereum will be able to process 100,000 transactions per second.
The Splurge: Smooth Work and Updates
Once all these previous parts come together, The Splurge phase begins.
It aims to ensure that the network continues to run smoothly and that the protocol updates in the previous sections do not cause problems.
A lot of work to make Ethereum more scalable will be completed.
This final phase is still in the distant future; as with all technological developments, there are bound to be glitches along the way.
Given that The Merge has taken much longer than expected, The Splurge – when it finally arrives – will mark a well-deserved final stage for the Ethereum network.
FAQ/Answers to Questions:
- Why is the projected merge date not given exactly?
The merge will happen at a certain value of network complexity.
The increasing complexity of the network, added with each block, depends on the hashing rate of the network, which varies. If the network’s hashing rate increases, then the merge will be achieved sooner.
The current merge date is September 15, 2022.
- Is anything required of Ethereum users or Ethereum owners?
Regardless of whether you own Ethereum on an exchange or in a self-managed wallet, you don’t need to do anything. If the exchange or wallet you use offers additional instructions or recommendations, you should make sure they actually come from them. Beware of fraud!
- Do stakers get unburned commissions?
Not all of Ethereum goes to transaction fees. Unburned fees or execution-level tips will be sent to steikers. This is due to the proof of stake that will exist after the merger. In addition to the new Ethereum minted as a blockchain reward, you also receive 30% of all transaction fees.
- Will the merger lower gas fees?
No. Sharding will lower gas fees, but that will be at a later stage – expected in 2023. You should know that L2s will also start to play a more important role after the merger.
- Will a new ETH2 token be created?
No. Since there will be no new network or new token on the Ethereum network. This is why the Ethereum Foundation is dropping the terminology “Eth1” and “Eth2”.
- Is there anything I need to do as a miner?
No. If you are mining on the main Ethereum network, you need to know that after the merger, that network will be fully share proof. It will not be possible to mine on such networks after the merger.
- What happens if I, as a miner or node operator, do not participate in the upgrade?
If you are using an Ethereum client that is not updated to the latest version, after the upgrade your client will sync with the blockchain before the merge.
You will be stuck on an incompatible circuit following the old rules and will not be able to send Ethereum or work on the Ethereum network after the merge.
