The Ethereum Merge is Coming: Here’s what you need to know
Tl;dr: Ethereum is anticipated to move to Proof-of-Stake (PoS) on or around September 15, 2022 making it more secure, less energy-intensive, and better for implementing new scaling solutions. Rest assured, your assets will be safe and secure during this period and no action is required to upgrade on your part. The following piece outlines what you can expect from Coinbase ahead of The Merge.
By Armin Rezaiean-Asel, Product Manager at Coinbase
On August 10, 2022 Ethereum completed the Goerli public testnet merge?—?its final trial before making the migration from Proof-of-Work (PoW) to Proof-of-Stake (PoS)* on mainnet (also known as the Merge). Ethereum is now anticipated to complete the Merge on or around September 15, 2022 (TTD 58750000000000000000000). Six years in the making, this milestone will reduce energy consumption for the Ethereum network by a projected 99.95% compared to PoW.
With the rise of DeFi and NFTs, the Ethereum network has endured traffic bottlenecks and unpredictable spikes in transaction (gas) fees. Although PoS on its own does not lower transaction fees, it does set Ethereum up to continue delivering on its scalability roadmap.
At Coinbase, we view this event as a major step toward scaling adoption of the cryptoeconomy and will support it in a variety of ways that align with our mission to increase economic freedom in the world.
What does the Merge mean for Coinbase users?
During the Merge, Coinbase will briefly pause new Ethereum (ETH) and ERC-20 token deposits and withdrawals as a precautionary measure. Although the Merge is expected to be seamless from a user perspective, this downtime allows us to ensure that the transition has been successfully reflected by our systems. We do not expect any other networks or currencies to be impacted and expect no impact to trading for ETH and ERC-20 tokens across our centralized trading products.
You will be informed via Twitter and the status page when ETH and ERC-20 tokens are available for deposits and withdrawals.
It’s important to always be on high alert for scams, but especially leading up to the Merge. We recommend you don’t send your ETH to anyone in an attempt to “upgrade to ETH2” as there is no ETH2 token. Your assets will be safe and secure during this period and no action is required to upgrade on your part.
Once the Merge is complete, you can find your staked ETH (ETH2) balance under your Ethereum (ETH) wallet on the platform. Your staked ETH will be listed separately from any unstaked ETH or dapp wallet ETH balance you might be holding. As a reminder, ETH2 is the ticker Coinbase set ahead of the Merge to represent staked ETH and will no longer be used after the Merge?—?there is no ETH2 token.
Staked ETH (ETH2) balances won’t be unlocked at the time of the Merge or be available to trade or transfer until the Ethereum protocol upgrade completes. The upgrade is anticipated to be completed by early 2023.
For Coinbase Prime and Coinbase Exchange customers:
Coinbase Prime users with ETH and ERC-20 balances may experience temporary delays in custody withdrawal availability. We recommend initiating any withdrawals or deposits prior to this date, or after the Merge completes. We’ll send specific institutional customer communications before the transition to give our customers specific guidance on timing and SLAs during this time.
For Coinbase Cloud customers:
Customers running their staking or node infrastructure through Coinbase Cloud should expect to experience a routine upgrade with approximately 10 minutes of downtime in advance of the Merge. Customer infrastructure should experience little to no downtime when the Merge block is passed, and changes will be backwards compatible. Our Customer Success team will reach out to inform you of upgrade timelines and if any other actions are required to prepare you for the Merge.
For Coinbase Wallet users:
Coinbase Wallet users with ETH and ERC-20 balances, as well as NFTs or DeFi positions on the Ethereum network, should experience minimal to no impact. Assuming a successful transition, the network will remain operational, and users can continue to transact with their self-custodied crypto on the Ethereum mainnet once the transition is complete. As always, network fees will be set by the network based on demand, and as a reminder, Coinbase neither sets nor collects those fees.
For Coinbase Commerce customers:
During the merge time, we will be temporarily pausing the ability to process new payments as a precautionary measure to ensure that funds are protected. In-process payments will also be delayed. Once the merge is complete, payment processing will be re-enabled. There is no action required by users and in-process payments will be confirmed at this time.
We aim to support the Merge with the least amount of friction possible for our users?—?without compromising on security. We’ll continue to provide updates on our Twitter and Statuspage as more information becomes available.
As a reminder, the Merge is the culmination of years of work by the Ethereum Foundation, independent researchers, client teams, infrastructure providers like Coinbase Cloud, and many others. At Coinbase, our role is to protect users’ assets and help ensure a seamless transition across Coinbase products. For Ethereum network specific information, you can follow the Ethereum Foundation Blog as well as the Ethereum network on Twitter.
*Proof-of-Work and Proof-of-Stake are the two main consensus mechanisms used to verify new blocks and add them to the blockchain. First pioneered by Bitcoin, PoW consensus mechanisms use mining to achieve these goals. On the other hand, popular PoS blockchains such as Cardano, Avalanche, Polkadot, and Solana utilize staking to achieve similar goals.
The Ethereum Merge is Coming: Here’s what you need to know was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
Text source: The Coinbase Blog - Medium
