Ethereum Foundation clarifies that the Merge upgrade won’t reduce gas fees

A clarification from the Ethereum Foundation on Wednesday stated that the network’s proof-of-stake transitory update — called the “Merge” — will not lower gas fees. The Ethereum Foundation addressed this issue:

Gas fees are a function of the network’s demand relative to its capacity. Merge disallows proof-of work and transitions to proof-of stake for consensus. However, it does not significantly alter any parameters that directly affect network capacity or throughput.

Merge is a new method of combining the Ethereum mainnet’s existing execution layer with the Beacon Chain’s proof-of-stake consensus layers. This will eliminate the need to mine energy-intensively. It is expected that it will land in the third quarter or final quarter 2022. Many traders and investors have purchased Ether in anticipation for the Merge upgrade. However, some seem to have done so under misconceptions about the network’s potential capacity once it is live.

Anyone can sync an Ethereum copy that they have verified or run a node. There are no initial Ether stake requirements. Staking is limited. You cannot withdraw staked Ether before the next Shanghai upgrade. However, liquid ETH rewards will be available in the form fee tips. To prevent any liquidity crisis, validator withdrawals will be restricted in rate once they are live.

The Merge will not make transactions significantly faster. The Merge will result in the APR yields for the network increasing by 50%, which is expected to attract capital. The Merge is expected to be completed by September 19, according to client developers. There will be no downtime during the transition.

Opinion writer on 7trade7