Preparing For The Ethereum Merge
An important event is about to take place on the Ethereum network this coming September 15, 2022 (as reported on Coindesk) or between September 15 and September 20 (the Ethereum Foundation list the date as September 19). It is The Merge, and there are some things holders of ETH will need to know in advance.
First of all, what is the Merge?
This is the transition from Proof-of-Work to a Proof-of-Stake consensus mechanism on the network. It will reduce the network’s carbon footprint, with a more energy efficient way to arrive at the validation of transactions and production of blocks. It is the first step toward more future updates leading to Ethereum 2.0 (ETH2).
What To Expect
Centralized exchanges and other crypto providers are already sending announcements to users ahead of time to prepare. Prior to the expected date, some of these providers will restrict the following regarding ETH (Ether) and ERC20 and ERC721 tokens:
- Suspension of deposits
- Suspension of withdrawals
- Suspension of trading
This affects networks that are based on the Ethereum ecosystem. This includes NFTs and DeFi tokens that run on the Ethereum network. It will also affect bridges from L1 and sidechains to the Ethereum network.
Those who hold ETH or other Ethereum-based tokens in personal wallets (not on exchanges or in the custody of a third-party) will still be able to deposit, withdraw and trade but at their own risk. However, their transactions could be affected, and are not irreversible, so it is best to wait until after The Merge has completed.
Final Words
In order to keep funds safe, let The Merge take its course. Avoid doing any transactions during the period between September 15 and 20, or until there is confirmation that The Merge has completed successfully. You will not be able to recover any funds lost during the upgrade, or reverse any transactions that occur on the blockchain.
Disclaimer: This is not financial advice and is for reference purposes only. Please DYOR to verify information.
