The Ethereum Merge|Common Misunderstandings of the ETH Merge that You May Have

Is the Merge equal to ETH2.0?

During the past six months, followers of the Ethereum community might have noticed that developers rarely mentioned the term Ethereum 2.0, which originally referred to a major upgrade set to help the network transition to PoS after it goes into the Serenity stage. However, as Ethereum’s roadmap evolved, the original roadmap witnessed several changes. In the beginning, Ethereum 2.0 included the Beacon Chain in Phase 0, the Shard Chains in Phase 1, and the Merge in Phase 2. After the Merge, the network will shift from PoW to PoS.

Will the Merge reduce Gas fees?

No, the Merge will only bring a shift in consensus, and the network will have to rely on sharding to cut Gas fees. As the first major post-merge upgrade, sharding will be able to reduce Ethereum’s Gas fees on L1. At the moment, the Ethereum community encourages users to migrate to L2 for cheaper transactions, and L1 will be used to ensure Ethereum’s security performance.

Will the Merge improve the network’s TPS?

The Merge will not improve the user experience of Ethereum by much. The shift from PoW to PoS alone will only slightly increase the network’s TPS. That said, sharding, the next step after the Merge, will genuinely boost Ethereum’s performance. According to the current plan of the ETH community, Ethereum will adopt the Danksharding proposal, which, coupled with Rollup technologies like Layer 2, would significantly improve Ethereum’s TPS if the proposal is successful. Concerning the Merge, Ethereum now intends to rely on the mainnet as a security guarantee, and the network encourages developers to create more Layer 2 solutions that tap into the Rollup technology. In the future, more users and projects will likely experience and develop applications on Ethereum’s Layer.

Considering that a massive amount of ETH staked will be released after the Merge, will ETH be dumped into the market?

After the Merge, stakers will not be able to withdraw the ETH staked right away, and their withdrawals will be unlocked in about 6 to 12 months. Furthermore, Ethereum has set a withdrawal/deposit queue. This limits the speed of making deposits and withdrawals by imposing a cap on the amount of ETH that can be deposited or withdrawn a day, which effectively avoids the impact of wild fluctuations.

Will Ethereum become more centralized after its switch to PoS?

Ethereum’s centralization has always been a controversial topic. ETH validators and PoW miners play the same role. Plus, ETH holders may not participate in the governance of Ethereum, and they can only update the blocks. In addition, as the current PoW mining on Ethereum comes with demanding requirements, and also because of the restrictions of mining operations, mining machines are often centralized in large venues, which means that the PoW nodes are not sufficiently decentralized. In contrast, PoS miners can mine ETH with regular PCs or even smartphones. Therefore, there is no evidence that Ethereum will become more centralized after it shifts to PoS.

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