The Merge Set For Dress Rehearsal as Anticipation Builds for Launch
Ethereum's Shift to Proof-of-Stake is Spurring Rally
By: Samuel Haig •Dive
Virtually all that’s left before The Merge takes place is a dress rehearsal.
The final testnet deployment for the next iteration of Ethereum is set to go live on the Goerli network in three weeks. Ethereum’s devs hope the code for The Merge will undergo minimal changes between launching on Goerli and hitting the mainnet.
The final deployment to a public testnet is scheduled for sometime between August 9 and August 11, according to a Github commit from Tim Beiko, an Ethereum core dev.
The Merge will be triggered when the network’s block height reaches total terminal difficulty (TTD), also known as ‘the difficulty bomb’. Beiko’s suggested TTD puts the Goerli merge, which will be the final testnet deployment for Ethereum’s transition from Proof of Work to Proof of Stake around, on track to take place around August 10.
The news was posted to Twitter by Terence Tsao, the founder of Eth2 client provider Prysmatic Labs, on July 18.
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With the Goerli difficulty bomb now set, many onlookers including Anothony Sassano, the host of The Daily Gwei podcast, are tipping The Merge to go live on mainnet in September.
The Merge will unify Ethereum’s Proof of Stake consensus layer, the Beacon Chain, with its existing execution layer, the Proof of Work mainnet. The move will kick miners off the network in favor of Proof of Stake validation, ushering in a 90% drop in new ETH issuance and a more than 99% reduction in the network’s electricity consumption.
Ethereum’s devs will also trial The Merge on 20 shadow forks — closed testnet deployments of the upgrade — to study how each combination of Ethereum’s four execution layer clients and five consensus layer clients will perform under Proof of Stake. Ethereum’s ninth shadow fork went live on July 15.
In a recent appearance on The Defiant Podcast, Justin Drake of the Ethereum Foundation said that Ethereum’s devs are aiming for the codebase for the Goerli merge to remain as unchanged as possible until the upgrade goes live on mainnet.
“We’re hoping for the client’s codebase to be at that point frozen so that the difference between the Goerli codebase and the mainnet codebase is as little as possible so that we reduce risk,” he said.
Anticipation for The Merge has fueled the ETH rally this week. ETH last changed hands for $1,540 following a 48% rally in seven days, more than twice as much as Bitcoin, according to CoinGecko..
The upgrade is tipped to render Ether deflationary, meaning that more supply will be destroyed through Ethereum’s burn mechanism than is created through rewards to validators. The shift to deflationary issuance will make ETH ‘ultrasound money’, a term popularized by Justin Drake that riffs on the ‘sound money’ mantra of Bitcoin maxis.
On July 18, Ultra Sound Money, a website tracking Ethereum’s burn rate, tweeted that ETH has consistently been destroyed at a pace exceeding the projected issuance of ETH following The Merge since base transaction fees started being burnt last August.
Weekly ETH burn rate. Source: Ultra Sound Money
Drake told The Defiant that “since the fee burn was activated, we’ve burnt 7,500 ETH every single day. When you compare that to an issuance of 1,600 ETH.”
He added that after The Merge goes live, the supply of Ether is expected to peak at roughly 120M and then fall to find a new equilibrium between 100M ETH and 60M ETH. There are currently 119.7M ETH in circulation, according to CoinGecko.