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June 14, 2022

Ethereum Merge – What is Ethereum 2.0 and The Merge?

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The Ethereum Merge is one of the long-awaited upgrades the leading chain expects to roll out later this year. While The Merge may not sound familiar, you’ve probably heard of Ethereum 2.0 or Eth2. After all, those have been the most commonly used terms ever since December of 2020, when Ethereum’s Beacon Chain launched, and staking on that chain became possible. However, regardless of what you call it, questions like “what is the Ethereum Merge?” and “when is The Merge?” remain. If you have these and similar questions running through your mind, then this article is just what you need!

Moving forward, we will inform you about all the necessary things regarding The Merge. Along the way, we will also explain the difference between Ethereum proof of stake and proof of work consensus mechanisms. Understanding these mechanisms is vital when discussing the Ethereum Merge. Furthermore, you’ll also learn more about why “Ethereum 2.0” will never come to life. In addition, we will answer some of the most frequently asked questions when it comes to this long-awaited Ethereum upgrade. Moreover, you will learn if there’s anything you need to pay attention to as a network user or a developer. Nonetheless, you will also learn how to create decentralized applications (dapps) in a future-proof manner. With Moralis, you can use the same code for deploying on Ethereum, non-EVM, or EVM-compatible chains. What’s more, you can get started with Moralis for free!      

What is the Ethereum Merge? 

The word “merge” alone tells you that The Merge has something to do with joining something together. You’ve also learned in the introduction that the Ethereum Merge refers to an important upcoming update on the leading programmable chain. Furthermore, you may also know that aside from the Ethereum mainnet and several Ethereum testnets, there’s Ethereum’s Beacon Chain. The latter was deployed in December 2020 but has been in “idle” mode since its inception. At the moment, this chain is only used for staking ETH.

However, The Merge will bring Ethereum’s mainnet and Beacon Chain together. In addition, this update is quite significant as it will mark the end of energy-intensive mining. The latter is known as the proof of work consensus mechanism, which the Ethereum chain currently uses to confirm transactions. Due to this transition from one type of consensus mechanism to another, you must understand both to some extent. However, before we dig into the PoS vs PoW battle, let’s also look at when The Merge will take place. 

When is the Ethereum Merge?

Looking at the screenshot above, you can see that the estimated schedule date for the Ethereum Merge is 2022. As such, the Ethereum Foundation has not published an exact date yet. The following is the most “specific” date that the Ethereum Foundation has provided: “a few months after June 2022”. Accordingly, Q3 or Q4 of 2022 is when we can expect The Merge to roll out. However, as you may know, previous Ethereum updates have typically been postponed several times. Thus, we can expect a delay for the Ethereum Merge as well. That said, currently “scheduled” 2022 could easily turn into 2023.

The Merge – From PoW to PoS 

There are some hybrid consensus mechanisms active on certain blockchains. However, proof of stake (PoS) and proof of work (PoW) are the two leading ways of validating blockchain transactions. As mentioned above, Ethereum currently uses PoW, which means that network contributors use the computational power of powerful computers to confirm transactions. Furthermore, this is also the consensus mechanism that Bitcoin uses, and it’s what you know as mining. So, in a decentralized network of Ethereum nodes, computers “mine” transactions by solving mathematical puzzles. Computers essentially compete to solve the puzzle first and collect the mining reward. On Ethereum, the miners earn ETH (BTC for Bitcoin). With all these powerful computers involved, it’s pretty easy to understand that PoW is quite energy-consuming. Moreover, given the ongoing environmental concerns (enhanced global warming), we must prioritize energy efficiency whenever and wherever possible.

On the other hand, in PoS consensus, validators come in the form of “stakers”. These are the crypto addresses that have staked (locked up) larger amounts of a native cryptocurrency. On Ethereum’s Beacon Chain, validators must stake ether (ETH). The larger amount staked, the higher the staking rewards. As such, this form of transaction confirmation is a lot more energy-efficient than PoW. You probably agree that if there’s a more environment-friendly solution that doesn’t compromise security, devs should prioritize it. This is exactly the stance that the Ethereum community took. Accordingly, they have been working on the transition to PoS for over seven years. Moreover, the Ethereum Merge is a result of thoughtfully long-term planning.   

The Ethereum Merge Explained

The Merge is one of the three major upgrades that aim to make Ethereum more scalable, secure, and sustainable. Perhaps you know this set of updates as Ethereum 2.0. These are the three major Ethereum upgrades:

  • The Beacon Chain (deployed in 2020) 
  • The Merge (planned for 2022)
  • Shard Chains (planned for 2023)

While Ethereum has been running relatively smoothly, it has also consumed a lot of energy. As such, making the network more eco-friendly is an essential step toward its mainstream adoption. In addition, if you’ve used Ethereum before, you must have noticed the network’s exorbitant transaction fees. Furthermore, Ethereum gas fees have been major pain points for users and developers. 

As such, only users and devs with deeper pockets were often able to utilize this chain. Even if your pockets are deep, you most likely agree that paying more than $50 in transaction fees for a simple token swap for something only worth a couple of dollars on Uniswap is absurd. Thus, the Ethereum Merge will make Ethereum more energy efficient and improve the chain’s speed and affordability. However, you shouldn’t expect the Ethereum gas fees to be lower right after The Merge. The latter will only set the stage for future upgrades, which will reduce the gas fee costs. 

The Beacon Chain and Mainnet Merge

In addition, you should also note that Ethereum’s Beacon Chain has been successfully running since 2020. This is the Ethereum chain that uses PoS. However, this chain has not been used for anything but ETH staking. All ETH transactions, smart contracts, and dapps have been active on the Ethereum mainnet. This will continue until The Merge. Then, the two (the mainnet and Beacon Chain) will come together to form an upgraded Ethereum that utilizes the PoS concept. The major direct upside of this upgrade comes in the form of an anticipated 99% energy-efficiency improvement.

The Merge vs Ethereum 2.0 

The set of above-listed Ethereum upgrades was formerly known as Ethereum 2.0. However, in January 2022, the Ethereum Foundation decided to scrap that terminology. Hence, “Ethereum 2.0” and “Eth2” are no longer valid. However, since many folks familiarized themselves with this nomenclature, it will take some time to phase it out. Moreover, the main reason the Ethereum Foundation decided to get rid of “Ethereum 2.0” was to avoid confusion. Since The Merge will unite the two existing networks, using that terminology wouldn’t make sense. After all, it implies that there are two different chains. When in fact, after the merger, the mainnet (“Eth1”) and Beacon Chain (“Eth2”) will be one. 

To further clarify the updated naming, refer to the following image, which will be relevant once the Ethereum Merge takes place:

Here’s also an explanation of the above graphic representation:

  • Eth1 becomes the “execution layer“, which handles transactions and execution.
  • Eth2 becomes the “consensus layer” that handles the Ethereum proof of stake consensus.
  • Eth1 + Eth2 becomes (execution layer + consensus layer) the updated Ethereum.

The Merge – FAQs

Since their announcement, there have already been many questions about the set of Ethereum upgrades. In addition, the name change (getting rid of “Ethereum 2.0”), though it makes a lot of sense in the long run, introduced additional confusion. As such, we want to clarify things by answering some of the most frequently asked questions about these upgrades and the Ethereum Merge in particular further.  

Didn’t Ethereum Switch to PoS in 2020?

When Ethereum’s Beacon Chain launched in 2020, we all had a chance to stake our ETH on that chain. As explained above, staking is that chain’s only functionality until The Merge. Consequently, many people presumed it meant that the Ethereum chain had already switched from PoW to PoS. Let’s point out again that this is not true. Until The Merge, the Ethereum mainnet is the operational chain. As such, PoW consensus is still running the show.

Is There Anything I Need to Do Before or After The Merge?

So far, all announcements stated that there’s nothing users need to do before or after The Merge. Since the upgraded Ethereum will contain the entire history of Ethereum (“Eth1”), the transition should be smooth. However, some unwanted complications might change that. Hence, we encourage you to pay attention to the Ethereum Foundation’s news and announcements as The Merge approaches.

How to Stake ETH?

Since Beacon Chain went live, you’ve had a chance to stake ETH. You get to do this via staking launchpads or staking pools. However, keep in mind that in order to become a full validator on the network, you need to stake at least 32 ETH. That’s quite a lot of ETH – more than most of us can afford. Fortunately, staking pools are a more accessible staking option. The latter enables you to stake less and earn fractions of the total rewards. 

When Can I Claim Staked ETH?

If you have ETH staked on Beacon Chain, you won’t be able to start withdrawing it immediately after The Merge. Instead, you’ll also need to wait for Ethereum devs to complete the post-merge “cleanup” upgrade. 

Will the Ethereum Merge Affect the Distribution of ETH?

As you know, The Merge will eliminate ETH mining (no more PoW). That will reduce the distribution of ETH by roughly 90%. Due to EIP-1559, ETH could even become deflationary if there were a lot of users and transactions on the Ethereum network.

How Will The Merge Affect My Dapps?

According to the information provided, your dapps on the Ethereum blockchain won’t be affected by The Merge. At least not directly. However, the Ethereum Foundation warns that the upgrades following The Merge may require you to tweak some things. 

Future-Proof Your Web3 Development with Moralis 

There’s a way to avoid limiting yourself to a particular chain when developing dapps. This is quite important if you want to future-proof your dapp development. Using the right Web3 tech stack, you can avoid the limitations of RPC nodes. Furthermore, you can create Ethereum dapps or dapps on other chains 87% faster. That is thanks to the power of Moralis. Also, you get to use your frontend skills, such as JavaScript or Unity, combined with the ultimate Web3 backend platform to get to the finish line quickly. In fact, you can have your minimum viable product (MVP) ready in hours or days instead of weeks or months. In case you forgot, let’s remind you that Moralis, a.k.a. “Firebase for crypto“, is free to start with. 

Furthermore, our latest topics might be the best starting point for you. For example, you can learn the ins and outs of an Ethereum NFT API, Polygon NFT API, Binance NFT API, and Solana NFT API. You can also learn how to get Solana NFT metadata, mint thousands of NFT game assets, upload Unity assets to IPFS, or create a crypto sentiment dapp.   

Ethereum Merge – What is Ethereum 2.0 and The Merge? – Summary

The crypto realm is evolving fast, which requires chains to implement upgrades to make the necessary shift. That’s exactly what The Merge reflects. By uniting Ethereum’s existing mainnet and Beacon Chain, the upgraded Ethereum will transition from PoW to PoS. As such, Ethereum will become a lot more energy-efficient. The Ethereum Foundation hasn’t yet announced the exact date of the Ethereum Merge. However, so far, Q3 or Q4 of 2022 is when the upgrade should roll out. Fortunately, there’s nothing you need to do before or after The Merge. You learned all that and much more in the sections above. 

You also learned about Moralis and how it can completely change your Web3 development game. We encourage you to take on some of our example projects and give this ultimate Web3 development platform a test run. You can find countless tutorials on the Moralis YouTube channel and the Moralis blog. Furthermore, if you want to focus on Web3 games design, the Unity Weeb3 programming tutorial is the place to start. Since non-fungible tokens (NFTs) continue to be all the rage, NFT utility is also an important topic. Or perhaps, you are ready to take on some more advanced challenges. These include building a Uniswap DEX clone, a Web3 Twitter clone, a Web3 Netflix clone, a Web3 Spotify clone, a Coinbase clone, an OpenSea clone, or a Reddit clone for Web3. However, if you want to become a Web3 developer with confidence, you may want to enroll in Moralis Academy!

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