What is the Ethereum Merge? This post dives into one of the most significant changes in crypto and how to navigate it.
Around September 13th, the Ethereum blockchain will transition from proof-of-work (PoW) consensus to proof-of-stake (PoS) in an upgrade known as “The ETH Merge.” In what will be one of the most significant moments in crypto history, the Merge is so called because the Ethereum blockchain (commonly referred to as “the Mainnet”) will merge with the Beacon Chain, its new proof-of-stake consensus layer. The permanent transition to a PoS model intends to make the network more energy efficient and more secure, as well as to pave the way for greater scalability.
Since the launch of the Beacon Chain in December 2020, it has been running parallel to the Ethereum blockchain as a way to test the PoS model without disrupting or impacting the existing PoW model. Now that testing is complete and the Ethereum developers are ready to merge the chains, it is expected that the transition to PoS will reduce power consumption by 99.95%. Such a significant improvement in energy efficiency will positively impact the network's potential and quell the fears of environmentally-conscious groups and individuals who believe crypto is bad for our planet. Watch the video below to understand the Merge in more detail.
In the meantime, here’s what the Merge means for you if you own any ETH or other ERC-20 tokens and more importantly, if you have any such tokens as collateral on our platform.
TLDR: unless you want/need to withdraw your tokens from our platform in advance of the ETH Merge, there is no action needed from you at this time.
What else there is to know?
Effective immediately after the Merge, SALT will only support proof-of-stake Ethereum blockchain tokens, including ERC-20 tokens like ETH, PAXG, USDC, TUSD, and USDP. Any of these accepted collateral types will remain secure in their respective SALT accounts throughout the Merge and will be available for transfer or withdrawal on the proof-of-stake blockchain shortly after the Merge is complete.
While we have taken the necessary steps to make for a smooth transition, please be aware that ERC-20 deposits, transfers and withdrawals may take longer to process around the time of the Merge and that SALT is not responsible for any network delays when sending coins.
For those of you who believe the Ethereum blockchain upgrade will result in multiple divergent chains and coins, and you would like to potentially receive those coins, we recommend withdrawing your collateral to a wallet or service provider that has announced it will support multiple versions of the Ethereum blockchain after the upgrade is complete. However, it is also recommended that you refrain from making any transactions immediately prior to the Merge and until the network has stabilized. You should also be sure that the wallet you’re using will be sending the collateral on the correct chain.
For additional details on the Merge, visit the Ethereum website.
Contact [email protected] for any questions regarding your collateral.