Despite the bear market, the Ethereum community still has The Merge to look forward to. And Ethereum’s devs are making significant progress.
The first public testnet merge took place in late May on the Ropsten network, with all necessary fixes having since been deployed. The Eth2 Beacon Chain will next be launched on the Sepolia testnet on June 20, paving the way for Ethereum’s second public testnet chain-merge soon after.
Ethereum’s chain-merge will transition the network’s consensus layer from Proof-of-Work Proof-of-Stake, and unify it with the existing execution layer. The upgrade will abandon miners in favor of stakers validating transactions, delivering a more than 99% reduction in energy consumption and 90% drop in new Ether created.
Coupled with base transaction fees being burned since August, the transition is tipped to result in more ETH being removed from supply than is created through validator rewards, known as deflationary issuance.
But the roadmap towards The Merge involves detailed testing, meaning the event has been postponed many times in the past. Before The Merge is deemed ready for prime-time it must first undergo 20 shadow forks — dress rehearsals executed on dedicated closed testnets — and three deployments to public testnets.
Josh Rogers, CEO and founder of digital asset investment platform Minterest, told The Defiant that the increasing share of Ethereum’s supply staked on the Eth2 Beacon Chain signals “huge trust in the network” despite the upgrade not yet going live.
“Possibly the best indicator of positive market sentiment towards The Merge is the sheer scale of staking. [There is] “a growing sector-wide belief in the viability and likelihood of Ethereum 2.0 and how the Proof-of-Stake model benefits further network growth.”
On June 15, Ethereum’s core devs released the specifications for the seventh shadow fork. Terminal Total Difficulty (TTD), also known as the “difficulty bomb” — a hardcoded deadline for the merge to occur at a specific block height — is on-track to explode on June 22.
The shadow forks will test each combination of Ethereum’s four execution layer clients and five consensus layer clients. Clients provide the software that is run by node operators. Having a variety of clients makes the network more resilient by eliminating the risk of a single client comprising a single point of failure for the entire network.
In other merge news, the difficulty bomb for the upgrade’s mainnet deployment has been postponed until mid-September.
Ben Edgington of ConsenSys tweeted that the delay may not put off The Merge past its current expected launch date in August. But others have acknowledged that the upgrade could again be rescheduled for a later date should issues be identified on testnet and shadow fork deployments.
Dusan Kovacic, chief investment officer at Rockaway Blockchain Fund, told The Defiant that the growing volume of staked ETH as indicating that the market is “more confident in the timeline of the Merge.
“Testing of the Merge is leading to lowered expectations of possible delays,” Kovacis said “Everyone can now see how it will work, and this increases user trust and positive sentiment… people are willing to take the risk of having their tokens locked for longer.”
According to Staking Rewards, around 10.6% of Ether’s supply is currently locked up for staking on the Beacon Chain despite withdrawal functionality tipped to go live months after The Merge takes place.