As the crypto community approaches the speculated mainnet merge date, there have been many misconceptions in the crypto world about its effect on Transaction speed, staking, and Gas fees.
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ETH Clears 8 Misconceptions About the Merge
On August 17, Ethereum updated its website Ethereum.org to clear the air on the misconceptions regarding the upcoming mainnet merge.
Last week, developers announced that the Ethereum transition from the proof-of-work to proof-of-stake consensus has been scheduled to be completed by September after being delayed for years, this provokes about 8 rumors relating to the merge.
Users, however, do not need to upgrade software, transfer funds, or send ETH to move to Ethereum 2.0, this information is provided as many scammers are likely to leverage the mainnet merge to scam traders and investors of Ethereum.
The first misconception is that the mainnet merge will result in the reduction of Gas fees, however, in response to this, the developers said that the transition to proof-of-stake will not expand the network’s capacity or throughput to reduce gas fees, the gas fees will depend on the Ethereum network demand.
The merge will however encourage a focus on increasing scalability in the Surge phrase through sharding and rollups to significantly reduce gas fees.
The second misconception is that the mainnet merge will increase the transaction speed, contrary to the rumors around, there will not be a considerable increase in transaction speed as blocks will be produced only 10% faster on PoS than the current PoW. It introduces the transaction finality and epochs concepts.
Users can however be expecting faster transaction speed of 100,000 transactions per second following the completion of all phases of the upgrade.
The merge will facilitate staked ETH withdrawals is another misconception surrounding the merge, contrary to this, the mainnet merge will not immediately enable staked ETH withdrawal, the Shanghai upgrade will only allow staked ETH withdrawals, which means Ethereum assets will remain locked and illiquid during the waiting period of 6-12 months.
The merge will result in downtime of the Ethereum blockchain is another misconception regarding the merge, however, the merge will be triggered by the terminal total difficulty (TTD) to transit the Ethereum to PoS automatically, there’s no downtime.
Running a node requires staking 32 ETH, this is another misconception as regards the merge. However, Mining nodes under proof-of-work (PoW) and validator nodes under proof-of-stake (PoS) require economic resources to process a block. A non-block-producing node doesn’t require ETH, but a computer with 1-2 TB of available storage and an internet connection. These blocks help increase the security, privacy, and censorship resistance of the Ethereum protocol.
Another misconception is that the merge will triple the staking APR, however, the APR may only be up by 50% and not 200%, the more fees paid by users will increase validators’ fee rewards.
Validators will not receive liquid ETH rewards is another misconception about mainnet merge. However, validated will receive immediate fee rewards and maximal extractable value earned during block proposals on ETH mainnet, on the Beacon Chain, the newly issued ETH will be locked until the Shanghai upgrade.
The last misconception is that all stakes will exit at once after withdrawals are enabled. Following the Shanghai upgrade, all validators will be incentivized to withdraw staked ETH or stake more using rewards. Moreover, validator exits are rate limited for security reasons that allow only 6 validators to exit per epoch or 6.4 minutes.
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