The Merge

Yanda
6 min readNov 24, 2022

The countdown for the Ethereum Merge has begun! After about seven years, the process that will get Ethereum to Proof-of-Stake (PoS) is ready and expected for the 14th of September.

This is the most significant upgrade in the history of Ethereum and the most critical day in cryptocurrency history. Thanks to this upgrade, Ethereum will be more scalable — only thanks to the later sharding — and energy-efficient.

A new era has come: Ethereum 2.0 is finally ready!

What does the Merge mean? And what are the motivations behind it?

The term Merge was already the milestone in this blockchain’s roadmap before the launch.

Its main goal is the transition of Ethereum from a proof-of-work consensus mechanism, also known as mining, to a proof-of-stake model where there are no miners and a group of validators, staking their ETH, will validate the network.

The roadmap to The Merge consists of two steps:

  • The first is characterized by the launch of the Beacon Chain (an infrastructure created for this purpose on December 1st 2020), which allows them to test it without impacting the existing PoW network for around 1.5 years. At the same time, it has also permitted to reach the right amount of staked ETH to secure the network at the merge. Read more about it in this Ethereum 2.0 overview.
  • The second is the so-called The Merge, the process that joins the consensus layer of the Beacon Chain with the EVM state of the Ethereum PoW chain.

This transition reduces power consumption by around 99.95%, silencing all the controversies concerning the energy waste of the crypto industry and making the Ethereum ecosystem ESG compliant (ESG stands for Environmental, Social, and Governance).

The merge was an eagerly-awaited event by the community because it completely changed the state of things in this network. But what are the motivations behind this revolutionary event?

  • First of all, the reduction in the ETH issuance should be decreased by 90%, thus forcing the asset to assume a deflationary state (because when the Merge will be fully completed, the PoW will be replaced by the PoS, reducing ETH issuance, also known as Triple Halving).

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Yanda

Hybrid Finance protocol linking CeFi and DeFi