Ethereum Merge

The Merge is tentatively scheduled for September 15, 2022. This date, however, is subject to minor changes.

Ethereum is transitioning from Proof-of-Work (PoW) to Proof-of-Stake (PoS) to enhance blockchain security, reduce energy consumption, lower barriers to entry by bringing down hardware requirements, and lay the foundation for future scalability.

Proof-of-Work relies on computers distributed across a decentralized network to validate transactions. In contrast, Proof-of-Stake depends on validators who add their token (in this case, ETH) as collateral in exchange for the opportunity to update the blockchain with the most recently validated transaction and acquire newly minted tokens.

Following the Merge, Ethereum’s energy consumption will decrease from 112 TWh/yr to 0.01 TWh/yr, resulting in a 99.95% reduction in total energy consumption.

The Merge is unlikely to reduce gas fees in the short term because the upgrade involves a change in the consensus protocol (the way Ethereum validates transactions) instead of increasing or expanding its capacity.

In other words, The Merge will phase out PoW and shift the blockchain to PoS, but this does not affect the blockchain’s capacity. The Merge will not directly impact gas fees because they are a natural consequence of demand vs. network capacity as opposed to the way the blockchain validates transactions.

The Shanghai upgrade, which will include the option to withdraw staked ETH, is still in the works, as is sharding, which also seeks to increase scalability by expanding the burden of handling and processing vast amounts of data across an entire network.

Due to the explosion of layer 2 scaling solutions, the original plans for addressing scalability via sharding before The Merge were swapped, with sharding now anticipated to ship sometime in 2023.

Sharding means allowing a database to be divided horizontally to distribute the load. In other words, sharding will assist in distributing the considerable burden of data processing across the entire network. This is expected to decrease traffic and shorten transaction times.

When The Merge is finished, there will be no distinction between ETH 1 and ETH 2, which have been rebranded as the implementation and consensus layers.

Moving forward, there would only be one Ethereum. It is a popular misconception that Ethereum 2.0 is a new coin or asset in and of itself. Well, it is not, and your existing ETH will continue to function normally. The Merge will not affect it.

Your assets will remain safe, as always, and no action is required on your part. There will be no need to convert your existing ETH into anything else before, during, or after the Merge. We will handle everything for you.

LCX’s exchange and trading will be fully operational during the Merge. The Merge only impacts ETH and ERC20 tokens. All other non-Ethereum tokens, like Cardano, Celo, and Bitcoin, are not affected.