BigONE Insight: All You Need To Know About The Upcoming Ethereum Merge
One event that has been teased in the DeFi space for several years is the transition of the Ethereum chain, the world’s largest blockchain, from proof of work consensus (POW) to proof of stake (POS) in what is now popularly known as the Ethereum merge.
Vitalik Buterin founded Ethereum in 2015, and it has since become the foundation for the most incredible innovations in the cryptocurrency space in terms of DeFi applications. Ethereum recently completed the merger of the Eth2 beacon chain and the Ropsten test network, a successful trial that has enabled the upcoming merger. The Eth2 beacon chain will be merged with the Ethereum mainnet, eventually converting the network from proof-of-work (PoW) to proof-of-stake (PoS) (PoS). Furthermore, Ethereum developers have been hard at work upgrading Ethereum 2.0 and transitioning the network to proof-of-stake. This will enable more users to participate and further decentralization and resistance to attacks. Furthermore, the upgrade is expected to cut Ethereum’s energy consumption by more than 99% and its issuance by 90%. This article will examine the Ethereum merger and what it means for DeFi and the future of cryptocurrency in general.
What exactly is the Merge?
The merge represents “the joining of Ethereum’s existing execution layer (the Mainnet we use today) with its new proof-of-stake consensus layer, the Beacon Chain,” according to the official website. It does away with the need for energy-intensive mining to secure the network with staked ETH. An exciting step toward realizing Ethereum’s vision of increased scalability, security, and sustainability.” Because of the environmental impact, Ethereum’s proof of work consensus has received a lot of criticism from Web3 skeptics, leading to the creation of the Beacon chain. The merger is set to take place on September 15, 2022.
The merge has been described as the most anticipated event in the cryptocurrency space in recent years, and it has resulted in an almost 100% increase in the price of Ethereum from its recent lows of $890.
Common Misconceptions About The Merger
There have been some misconceptions about the impact of the merger on the existing Ethereum network and its users. It’s worth noting that the Merge aligns with Ethereum’s vision for a self-sustaining, robust, and scalable DeFi ecosystem. Some of these myths are as follows:
- Gas fee reduction: The merge will not result in a reduction in gas fees because it is more concerned with expanding the Ethereum network capacity.
- Ethereum downtime: The merge will not cause the Ethereum chain to go down, as many believe, because the transition was designed to be seamless and cause no downtime.
- Faster transactions: The Ethereum foundation has stated that transaction speed on the chain will largely remain unchanged after the merge.
What Does the Merge Mean for DeFi’s Future?
BigONE believes this approach is the best way for DeFi to advance to the next level. If we are to displace traditional finance, we must mitigate security risks and ensure scalability as much, including using a consensus like the POS that considers security and scalability. If the merger is successful, we should see a positive movement in the market in terms of digital asset prices in the short term. However, if the merger fails, there will be negative sentiments about the future of decentralized finance and a loss of investor confidence.
The Ethereum Merge Activity of BigONE
BigONE’s top priority is user safety, and we do everything we can to ensure user profitability in cryptocurrency. We have introduced the Ethereum savings feature, which guarantees 1%, as well as the Ethereum DeFi pool, which offers users a 3.3% APR. Furthermore, we have created a dedicated section to educate users on the merge and curated a list of altcoins to look into in advance of the merge.
More details here: https://bigone.com/en/activity/eth
BigONE believes that this merge will significantly impact the future of cryptocurrency and lead to a bull run in better market conditions by onboarding new investors and resolving the lingering issue of energy consumption caused by the use of Proof of Work. With this merge, DeFi is one step closer to displacing traditional finance.