Research Study

The Ethereum Merge

What to Expect from the Biggest Protocol Change to the World’s Second-Largest Digital Asset

by Jack Neureuter and Daniel Gray

One of the most anticipated events in the history of the digital asset industry is set to take place in September – The Ethereum Merge. This is expected to bring about a host of emerging investment narratives for crypto’s second largest asset by market cap and largest smart contract platform.i

In this report, we cover what you need to know about The Merge, including the key topics below:

  • The Ethereum Merge, expected to take place on September 14, 2022,ii will transition the Ethereum network’s consensus mechanism from proof-of-work to proof-of-stake.
  • With staking, miners are replaced with validators posting collateral and attesting to transactions, and competition is replaced with randomization.
  • The Merge is expected to have several potential benefits such as decreasing Ethereum’s energy consumption by over 99%.1
  • It also comes with potential risks, including centralization concerns, technical challenges, and liquidity concerns for stakers. 
  • This milestone is not the end of Ethereum’s evolution towards an eventual mature state. The next series of upgrades following this event will be centered around transaction speed and cost – known as scaling.2

Download the report: The Ethereum Merge

 

 

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i At the time of writing, 8/10/2022, per CoinMetrics

ii At the time of writing, the latest target date is September 15, 2022 per The Ethereum Foundation blog and developer call https://blog.ethereum.org/2022/08/12/finalized-no-36/ 

1https://ethereum.org/en/energy-consumption/

2https://ethereum.org/en/upgrades/vision/

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