The excitement surrounding the next Ethereum (ETH) upgrade, The Mergewhich involves the merger of two blockchains —the Ethereum Mainnet and the Beacon Chain— has unknowingly stimulated rumors in the community.
Rated as the most important update in the history of Ethereum, The Merge marks the end of proof-of-work (PoW) for the Ethereum blockchain. However, here are five misconceptions that stand out from the rest.
Misconception 1: Ethereum gas fees will drop after The Merge
That the impending Ethereum upgrade will reduce Ethereum’s infamous gas fees (transaction fees) is one of the biggest misconceptions circulating among investors. Although lower gas rates top every investor’s wish list, The Merge is a consensus mechanism change that will make the Ethereum blockchain go from PoW to proof-of-stake (PoS).
Instead of this, reducing gas fees on Ethereum will require work on scaling network capacity and performance. The developer community is currently working on a rollup-focused roadmap to make transactions cheaper.
Misconception 2: Ethereum transactions will be faster after The Merge
It is safe to assume that Ethereum transactions will not be noticeably faster. However, there is some truth to this rumor, as the Beacon Chain allows validators to publish a block every 12 seconds, which on the Mainnet takes approximately 13.3 seconds.
Although the Ethereum developers believe that the transition to PoS will allow a 10% increase in block production, the slight improvement will go unnoticed by users.
Misconception 3: The Merge Will Cause Ethereum Blockchain Downtime
Contrary to the misconceptions that foresee positive results for Ethereum from The Merge, a popular rumor suggests that the planned update will momentarily bring down the Ethereum blockchain.
The developers do not foresee any downtime while the blocks go from being built with PoW to being built with PoS.
Misconception 4: Investors will be able to withdraw staked ETH after The Merge
Staked ETH (stETH), a cryptocurrency backed 1:1 by ETH, is currently locked on the Beacon Chain. Although users would love to be able to withdraw their stETH holdings, the developer community has confirmed that the update does not facilitate this change.
Withdrawal of stETH holdings will be available during the next major update after The Merge, known as the update Shanghai. As a result, the assets will remain locked up and illiquid for at least 6-12 months after the merger.
Misconception 5: Validators will not be able to withdraw ETH rewards until the Shanghai update
While stETH remains locked to investors until withdrawals resume after the Shanghai update, validators will have immediate access to fee rewards and maximum extractable value (MEVfor its acronym in English) earned during execution layer or Ethereum Mainnet block proposals.
As the fee compensation will not be newly issued tokens, it will be available to the validator immediately.
Sharing his opinion on the untapped potential of Ethereum, Polygon co-founder Mihailo Bjelic told Cointelegraph that zkEVM Rollups, a new scaling solution for Ethereum, will allow the smart contract protocol to surpass Visa in terms of transaction performance.
Sandeep Nailwal, the other co-founder of Polygon, echoed Bjelic’s thoughts in anticipating that solution will reduce Ethereum fees by 90% and increase transaction throughput to 40-50 transactions per second.
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