The Merge Works! Ethereum’s Passes Major Test in Shift to Proof of Stake
Ethereum just passed a big test as The Merge was completed.
By: Samuel Haig •DeFi News
The Ethereum community has a lot to look forward to.
On March 15, The Ethereum Foundation announced that The Merge was successfully completed on Kiln — the final merge testnet before the upgrade will be deployed on Ethereum’s public testnets.
Ethereum’s highly anticipated chain merge will combine the Eth2 Beacon Chain with the existing Ethereum mainnet, transitioning the network from Proof-of-Work to Proof-of-Stake-based consensus.
The move to Proof-of-Stake will usher a dramatic reduction in ETH issuance. Combined with the network burning base transaction fees since EIP-1559 went live last August, many analysts prophesize Ethereum will become deflationary after The Merge. That means more ETH will be destroyed faster than new Ether is created, which should bolster its value.
The Merge is also tipped to slash energy consumption by more than 99%, bolstering the network’s sustainability and censorship-resistance.
On March 14, “Litocoen” of Hop Protocol tweeted that chain merge will usher a 90% reduction in daily ETH emissions to 12,000 Ether from 1,280 Ether. The researcher described The Merge as “the equivalent of three halvenings at once,” adding that annual inflation will be slashed to 0.43% from 4.3%. He emphasized that the predicted 90% drop in issuance does not factor in the fee burn introduced with EIP-1559, which has destroyed $5B in Ether since launch.
“Taking ETH burn into account[,] Ethereum will be deflationary,” he added.
Further, Litocoen estimated the transition to Proof-of-Stake will cut Ethereum’s energy consumption by 99.95%. “It will be tiny even compared to traditional payment networks,” he said, forecasting that Ethereum will consume only 0.4% of the energy guzzled by Visa’s payments network.
“Being less reliant on the grid is not only a relief for the environment,” he said. “It will also be much harder for state actors to censor the network,” he said. “Hundreds of thousands of people will be able to run PoS validators at home.”
Ethereum’s researchers have been busily making progress towards the Eth2 chain merge in spite of the recent bearish momentum in the markets.
On March 15, the Ethereum Foundation announced that The Merge had been successfully executed on the recently launched Kiln testnet.
“Like the Ethereum mainnet, Kiln’s execution layer was launched under proof-of-work in parallel to a Beacon Chain running proof-of-stake,” the foundation wrote. “The Merge happened on Kiln on March 15, 2022. The network is now running entirely under proof-of-stake!”
The organization added that Kiln “is expected to be the last merge testnet created before existing public testnets are upgraded.” It also urged developers, node operators, infrastructure providers, and stakers to experiment on Kiln before attempting to launch on public testnet deployments of The Merge.
The milestone follows three months of testing on Kiln’s predecessor, the Kintsugi merge testnet, through which “a set of stable and robust protocol specifications” for The Merge were developed.
In light of the recent progress, Superphiz, an Ethereum researcher, predicted on March 11 that The Merge will occur in June of this year. He cited comments from devs relating to the difficulty bomb and hard fork expected in June, the importance of items already completed on The Merge Mainnet Readiness Checklist, and Kiln’s progress as informing his forecast.
However, he added “I’d rather steadfastly predict June and be wrong, than lower the community expectation and by right. Let’s keep pushing for June.”