The upcoming merger will not cut gas costs, Ethereum Foundation clarifies

There are probably rumors and misconceptions about the Ethereum Merge as it is one of the most anticipated events in the cryptocurrency space in recent years. The Ethereum team has addressed some of these misconceptions in a new blog post, which will go live in a few weeks.

Reduction of gas costs? no

The current proof-of-work mechanism comes to an end when the Ethereum Mainnet merges with the Beacon Chain proof-of-stake system. Because this mechanism consumes so little power, Ethereum’s power consumption will be reduced by 99.5%, according to the blog article.

But the Ethereum Foundation clarified on Wednesday that the next proof-of-stake temporary upgrade to the network, known as the “Merge,” will not lower gas costs. The Ethereum Foundation wrote this in connection with:

“Gas tariffs are a product of network demand in relation to network capacity. The Merge disapproves of proof-of-work and moves to proof-of-stake for consensus, but does not change significant parameters that directly affect network capacity or throughput.”

Energy-intensive mining is not necessary according to The Merge, which aims to combine the current execution layer of the Ethereum mainnet with its brand new proof-of-stake consensus layer, the Beacon Chain. It is expected to land in the third or final quarter of 2022. Despite the fact that many traders and investors bought Ether in preparation for 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.

Other things to know about the Ethereum merge

The foundation also ruled that the claim that “32 ETH is required to run a node” is not true. They claim that there is no fixed number of people who can run a node and that ETH is not required in the traditional sense.

For starters, there are no initial requirements for staking Ether and anyone is allowed to sync their own self-verified copy of Ethereum or run a node. It is not feasible to revoke depleted Ether until the subsequent Shanghai upgrade is operational. However, liquid ETH benefits in the form of tips are readily available. Once launched, validator withdrawals will be limited to avoid a potential liquidity crisis.

The market cap of Ethereum stands at $225 billion. Source: Trading Display

After the Merge, transactions will not go faster either. To raise capital, the network’s APR yield is expected to increase by 50% post-merger. The Merge, which is expected to have minimal downtime during the transition, is now being developed by customer developers with a possible September 19 end date in mind.

Validators receive fee tips/MEV as compensation, which are paid into a mainnet account and administered by the validator immediately after the merger.

Responding to concerns that validator withdrawals would be made in large quantities once allowed, the foundation stated that “only six validators per era are allowed to leave (every 6.4 minutes, or 1350 per day, or only 43,200 ETH per day on more than 10 million ETH wagered).”

To prevent a mass exodus, it further stated that the speed limit would be changed based on the amount of ETH still being staked.

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