Contrary to what some believe, the Etheruem ETH/USD Merge event will not reduce gas fees or speed up transactions.
What Happened: As The Merge approaches, the Ethereum Foundation uploaded a note addressing some misconceptions associated with the network’s transition to Proof-of-Stake (PoS).
1. Misconception: "Running a node requires staking 32 ETH."
“False. Anyone is free to sync their own self-verified copy of Ethereum (i.e. run a node). No ETH is required. Not before The Merge, not after The Merge, not ever,” said Ethereum in a blog.
2. Misconception: "The Merge will reduce gas fees."
The Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees, explained the developers.
3. Misconception: "Transactions will be noticeably faster after The Merge."
The transaction speed will mostly remain the same on the Layer 1 blockchain post The Merge, said the Ethereum Foundation.
4. Misconception: "You can withdraw staked ETH once The Merge occurs."
Staked ETH, staking rewards to date, and newly issued ETH immediately after The Merge will still be locked on the Beacon Chain without the ability to withdraw, said the developers.
5. Misconception: "Validators will not receive any liquid ETH rewards till the Shanghai upgrade when withdrawals are enabled."
This may seem counterintuitive to the above note that withdrawals are not enabled until the Shanghai upgrade, but validators WILL have immediate access to the fee rewards/MEV earned during block proposals, said the team.
6. Misconception: "When withdrawals are enabled, stakers will all exit at once."
“When withdrawals are enabled, if the rate is too low, then validators will exit at a rate limited by the protocol. Gradually this will raise the APR for everyone who remains, attracting new or returning stakers yet again,” stated the Ethereum developers.
7. Misconception: "Staking APR is expected to triple after The Merge."
“False. More up-to-date estimations predict closer to a 50% increase in APR post-merge, not a 200% increase,” stated the developers.
8. Misconception: "The Merge will result in downtime of the chain."
“False. The Merge upgrade is designed to transition to proof-of-stake with zero downtime,” said the developers.
See Also: Proof of Stake Vs. Proof of Work
ETH Price Action: At press time Thursday, ETH was trading at $1,861.58, up 1.44% over the last 24 hours.
Photo: bfk via Shutterstock
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