The Merge: the big misunderstanding that embarrasses Ethereum

The Merge will not solve all of Ethereum’s problems – The network Ethereum is about to go into Proof of Stake via the update The Merge. However, a myth persists regarding The Merge. Indeed, many people think that The Merge will have a positive impact on costs on Ethereum. The Ethereum Foundation is trying to put an end to this once and for all myth.

What is The Merge

The network Ethereum currently uses Proof of Work to ensure consensus between its nodes. Nevertheless, since its creation, the developers have aimed to transition to a Proof of Stake system.

In December 2020, a new channel called beacon chain was launched by Ethereum. This operates in parallel with the current network and has the sole mission of ensuring consensus in Proof of Stake.

For its part, The Merge is the update which will allow connect the application layer of Ethereum to the consensus layer in Proof of Stake. Otherwise, it means that the blocks created by transactions made on Ethereum will be validated by the beacon chain in Proof of Stake.

At their most recent meeting, the developers decided that the merger would take place on September 15.

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The Merge will not reduce fees on Ethereum

As the fateful date of the merger approaches, the Ethereum Foundation wanted to put an end to a myth that has been running for several months.

Thus, on its website, it has updated the information relating to The Merge to add a final answer to a question that keeps coming back.

No, The Merge will not reduce fees on Ethereum.

The Merge will not reduce fees on Ethereum.

Gas charges are a product of network demand versus network capacity. The merge deprecates the use of proof-of-work, and moves to proof-of-stake for consensus, but does not significantly change parameters that directly influence network capacity or throughput. »

Indeed, it is common to see Internet users announce a reduction in fees after The Merge. A Received idea which does make sense. The move to Proof of Stake is indeed part of the general plan to improve Ethereum’s scalability.

However, Proof of Stake does not actually improve scalability. However, this update allows improve the operation of second-layer solutions and paves the way for the deployment of Sharding.

ETH 2.0: a roadmap centered around rollups

Following his explanations concerning the non-reduction of fees via The Merge, the Ethereum Foundation recalls its current priority: the rollups.

Indeed, although The Merge does not reduce costs, the transition to Proof of Stake does improve the capabilities of second-layer solutions. Thus, until the deployment of sharding, the Ethereum community relies on rollups to improve the scalability of the network.

With a rollup-centric roadmap, efforts are focused on increasing user activity at Layer 2, while enabling the Layer 1 Mainnet to be a decentralized and secure settlement layer , optimized for storing rollup data to make rollup transactions exponentially cheaper. The transition to proof-of-stake is an essential precursor to achieving this goal. »

In recent months, these second layer solutions have experienced a meteoric rise. Little by little, these begin to deliver their promise by offering low-cost ecosystems.

In practice, the majority of existing rollups on Ethereum offer a reduction in fees ranging from 50 to 99%.

Average fees observed on Ethereum rollups.
Average fees observed on Ethereum rollupsSource:

Rollups will still have to develop to offer an ecosystem as rich as that of Ethereum’s mainnet.

At the same time, the Ethereum community is at the heart of a legal and philosophical turmoil in the context of the Tornado Cash case. Faced with regulation, the Resistance organizes itself.

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