Ethereum Merge Upgrade 

Owned by Egya (Unlicensed)
Last updated: Aug 22, 2022
2 min read

The Merge represents the joining of the existing execution layer of Ethereum, (Mainnet) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminates the need for energy-intensive mining and instead secures the network using staked ETH.

Prior to the activation of the Merge upgrade, the Ethereum Mainnet runs in parallel with the Beacon Chain. The former runs on a Proof-of-Work (PoW) consensus mechanism while the latter runs on a Proof-of-Stake (PoS) consensus mechanism. With the rollout of the Merge upgrade, the two networks will come together and operate as one.

The Merge upgrade will allow the network to fully change its consensus mechanism, Proof-of-Work consensus and adopt the Proof-of-Stake (PoS) consensus, which uses the element of Ethereum staking. Ethereum's PoS transition plays a critical role in slashing the heavy computational power that Proof-of-Work (PoW) consensus mechanism utilizes while processing transactions on the Ethereum blockchain.

The Ethereum Merge upgrade is expected approximately 15th September 2022 once Ethereum network’s Terminal Total Difficulty (TTD) reaches 58750000000000000000000.

Announcement by Vitalik Buterin  

Ethereum blog with detailed schedule – https://blog.ethereum.org/2022/08/12/finalized-no-36/  

Consensus specifications - https://github.com/ethereum/consensus-specs  

 

Evaluation Process   

 MidChains evaluates:   

  • What is changing?  

  • Analyse the impact of those changes.  

 

What is Changing?  

  • The Merge consists of a sequence of two upgrades – Bellatrix on the Consensus Layer followed by Paris on the Execution Layer.

    • Bellatrix upgrades the Beacon Chain to be “Merge aware”, embedding the Beacon Chain with the Merge logic as validators begin diligently monitoring the Proof-of-Work chain to initiate the Merge transition. Bellatrix is activated at Epoch 144896.

    • Paris Upgrades – Paris is the Merge transition itself, in which Ethereum Mainnet hot-swaps its consensus from Proof-of-Work to the Beacon Chain’s Proof-of-Stake. The Paris upgrade activates at the chosen Terminal Total Difficulty (TTD) 58750000000000000000000

  • Validators - Anyone can become a validator by depositing (staking) a minimum of 32 ETH into the specific contract. The protocol then randomly selects participants to propose and vote on new blocks. Staked Ether by validators cannot be withdrawn immediately after the Merge upgrade.

  • EIP 3675 – this EIP deprecates Proof-of-Work (PoW) and supersedes it with the new Proof-of-Stake consensus mechanism (PoS) driven by the beacon chain. Information on the bootstrapping of the new consensus mechanism is documented in EIP-2982. Full specification of the beacon chain can be found in the consensus-specs repository.

Release candidate for Bellatrix Mainnet -  

https://github.com/ethereum/consensus-specs/releases/tag/v1.2.0-rc.2  

 

Impact Analysis  

MidChains will support the Ethereum Merge upgrade. Deposits and withdrawals for Ethereum and ERC 20 tokens - Polygon Matic and Chainlink shall be temporarily halted during the transition as a precautionary measure.  Clients’ funds will, however, not be impacted by this upgrade. All deposits and withdrawals made after the upgrade are expected to be processed without any impact. 

Impact on Client Funds: No impact to clients' funds post network upgrade.

 

Regulatory implications: None.  

Maturity / Market Capitalization: None.  

Security and Operations: Enhanced security, improved efficiency and accessible to new validators. 

Traceability / Monitoring: The upgrade will not have any effect on addresses; hence tracing will not differ.  

Exchange Connectivity and Demand: No impact.   

Type of Distributed Ledger Technology (DLT): No impact. 

Innovation and Efficiency: Enhanced scalability and efficiency.