What is The Ethereum Merge?

The Ethereum Merge took place on September 15, 2022. The Merge was a two-step process. The first step was a consensus-layer network update, Bellatrix, followed by Paris, the execution layer’s transition from PoW to PoS.

A soft deadline of September 10-20 (or block number 58,750,000,000,000,000,000,000) was first announced for the Paris upgrade, though this will largely depend on the success of the final testnet merge and a number of other technical factors.

Ether (ETH), the native cryptocurrency of the Ethereum blockchain, remained the same after The Merge takes place. ETH holders and Ethereum users did not need to take any steps prior to The Merge in order to prepare for the transition from PoW to PoS. There was no need for ETH holders to convert their assets into any new cryptocurrency.

Absolutely nothing. The Merge was be implemented in such a way that Ethereum users did not notice any unusual activity during the transition or changes to their assets or wallet balances. 

Any one telling you that you needed to take action in order to prepare for The Merge was likely attempting scam or phishing attack.

No. Everything surrounding the ETH cryptocurrency remained exactly the same post-Merge as it was before. This means all wallets continued to work as normal, using the same address, and no new wallets or upgrades will be required.

In a January 2022 blog post, the Ethereum Foundation moved away from the ETH2 naming convention, as they felt it was not technically accurate and was leading to confusion about a new blockchain/cryptocurrency being created. The ETH tokens that existed before The Merge are the same as the ETH tokens that exist after The Merge (there was no new native token for the Ethereum blockchain).

Any NFTs held on marketplaces, in wallets or pending in transactions were not impacted during or after the update. The latest Ethereum state at the point of The Merge was joined with the Beacon Chain and no action was required by Ethereum users or ETH holders.

Any Ethereum-based assets deposited into liquidity pools or deployed in any type of DeFi-based protocols remained unaffected by The Merge.

While mining ETH is no longer be possible after The Merge, it is still be possible to mine Ethereum Classic (ETC) – a proof-of-work blockchain which separated from the Ethereum chain – that emerged in 2016. You can learn more about the difference between Ethereum and Ethereum Classic in the Kraken Learn Center guide here.

No downtime on the Ethereum network occured during The Merge. However, in order to ensure a smooth transition, funding (deposits and withdrawals) of ETH and all Ethereum based tokens (ERC20) was placed on a temporary hold by some services.

No. Unstaking of already-staked ETH tokens was part of the Shanghai upgrade – which took place after The Merge on April 12, 2023.

You can learn more about this upgrade in our blog post Ethereum Shanghai Upgrade: What you need to know.

Ethereum Classic remained as a PoW blockchain after The Merge.The Merge will not directly affect the Ethereum Classic blockchain.

The Beacon Chain is the PoS consensus layer for Ethereum. Initially launched in December 2020, the Beacon Chain went through rigorous testing while running alongside the PoW blockchain. The Merge saw the consensus mechanism of the Ethereum blockchain replaced by the Beacon Chain, which will predominantly organize and maintain a record of all stakers on the network.

Staking refers to the process of a user becoming a validator on a PoS blockchain by locking up an amount of native tokens in a staking smart contract. By doing so, they stand a chance of being selected by the protocol to propose new blocks of transactions and other data in exchange for interest payments.

Mining refers to the process PoW blockchains use to add new transactions to the blockchain. Miners compete against each other to validate batches of transactions by submitting the solution to a computationally rigorous mathematical puzzle, which is difficult to solve but easy for the rest of the network to check.

Staking seeks to deliver the same result: proving the validity of transactions. By first committing cryptocurrency as collateral, network validators are incentivized to behave honestly and penalized for not behaving honestly.

Prior to The Merge, the Ethereum mainnet – where all transactions and smart contract data are stored – relied on a PoW system and mining. For the 18 months or so prior to The Merge, the Beacon Chain, which uses PoS and staking to validate transactions, ran in parallel to the PoW mining-based blockchain. 

The Merge was the process of swapping out the PoW system that keeps the Ethereum blockchain functioning for the new PoS mechanism of the Beacon Chain.

Not noticeably. Although blocks were expected to be created 10% more frequently on the post-Merge, PoS-based Ethereum blockchain than the pre-Merge, PoW- based chain, most Ethereum users were unlikely to notice any meaningful difference. PoW Ethereum had a target set to create a new block every 13.3 seconds. PoS based Ethereum aims to create a new block every 12 seconds.

Ethereum gas fees, the transaction fees that network users pay to those adding and maintaining blocks of data on the Ethereum blockchain, did decrease significantly as a result of The Merge. This is because The Merge changed the way blocks of transactions were committed to the chain, rather than expanding the capacity of the chain itself.

The Merge did not include the introduction of sharding, but did lay the technical foundation for sharding techniques to be implemented on the Ethereum blockchain at a later date. Sharding is a scaling solution involving splitting a blockchain into multiple smaller shard chains in order to reduce network congestion and increase transaction throughput.

The Merge was expected to cut Ethereum’s energy usage by 99.5%. By transitioning from the energy-intensive competition of PoW mining to the incentives and penalties approach of PoS, the Ethereum network was expected to achieve a notable carbon footprint reduction.

There was a chance that a different version of the chain might be created, in addition to the PoS chain resulting from The Merge. This all depends on whether existing Ethereum miners come together to execute a hard fork before The Merge. In the end, The Merge did also result in a new cryptocurrency know as EthereumPoW.

After The Merge takes place, Ethereum’s ether token will still retain the ETH ticker symbol on Kraken. ETH holders and stakers will still be able to find their tokens under the ETH symbol. 

If the previously mentioned miner hard fork is successfully implemented, it’s likely a new Ethereum-like coin will be created. This would exist separately from Ethereum’s native cryptocurrency, ETH, and have its own ticker symbol. 

ETH and NFTs held on marketplaces, in wallets or pending in transactions were impacted by The Merge. Similarly, Ethereum-based digital assets used in DeFi protocols or other Ethereum-based services remained unaffected by The Merge.

Yes, as a result of The Merge, a new token was also created. You can learn more about this in our blog post EthereumPoW (ETHW) trading starts now + token distribution.

Several updates and milestones are on the Ethereum roadmap over coming years. The two most notable events directly related to The Merge are the Shanghai upgrade and sharding.

The Shanghai upgrade , which took place in April 2023, allowed allow ETH holders who have staked their ETH tokens since the launch of the Beacon Chain to unstake and regain access to their ETH tokens.

The Merge also lays the technical foundation for sharding techniques to be implemented. Sharding is expected to allow the Ethereum blockchain to reach greater scalability and overall transaction throughput. The Merge, and the usage of a PoS consensus algorithm, was an essential building block prior to implementing sharding techniques on the Ethereum blockchain.

The name ETH 2.0 (as well as Ethereum 2.0) originally existed as a way to reference the Ethereum blockchain post-Merge (after the Ethereum mainnet's transition to PoS occurs). However, the Ethereum Foundation moved away from using this name as it led to confusion about a new blockchain/cryptocurrency being created. 

ETH1 now refers to the execution layer, which handles transactions and executions, while ETH2 refers to the PoS consensus layer.

The name for the Ethereum blockchain and its native token, ETH, remained unchanged after The Merge.

After The Merge, Ethereum transitioned to PoS from its current PoW model. The PoS consensus mechanism effectively eliminated mining as a way to secure the network. Miners were replaced with stakers, who lock up ETH tokens for the right to validate transactions.

Shanghai was the next major upgrade after the successful transition to PoS occurs. Staked ETH, staking rewards and newly issued ETH remained locked on the Beacon Chain until the implementation of the Shanghai upgrade.

Check out our blog post Ethereum Shanghai Upgrade: What you need to know for more information.