Wednesday, February 8, 2023
HomeAltcoinHighly Anticipated Ethereum Merge Would Not Lower Gas Prices

Highly Anticipated Ethereum Merge Would Not Lower Gas Prices

  • Following the Merge, there will be no discernible increase in transaction speed. 
  • The Merge will render energy-intensive mining obsolete.

In a statement published on Wednesday, the Ethereum Foundation made it clear that the planned proof-of-stake transitional update to the network, known as the “Merge,” would not result in lower gas prices. 

The Ethereum foundation stated:

“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput.”

Multiple Myths Cleared Out

The Merge, which aims to unite Ethereum’s current execution layer with its new proof-of-stake consensus layer, the Beacon Chain, will render energy-intensive mining obsolete. 

There is no initial Ether staking required for anybody to sync their own self-verified copy of Ethereum or to host a node. The foundation determined that the statement “32 ETH is required to run a node” was false. They argue that there is no hard limit on the number of node operators, and thus ETH is not strictly necessary in the traditional sense.

Furthermore, following the Merge, there will be no discernible increase in transaction speed. However, after the Merge, APR returns on the system are forecasted to rise by 50% compared to current levels. The Merge is planned to have no downtime, thus client developers are working towards a potential deadline of September 19 to finish their work.

Since the Merge will render energy-intensive mining obsolete, it will no longer be necessary. For the uninitiated, the purpose of the update is to integrate the Beacon Chain, Ethereum’s new proof-of-stake consensus layer, with the mainnet’s current execution layer. Many buyers of Ether have been holding out for the Merge update, and some of them seem to be under the mistaken impression that the network’s capacity would grow once Merge is implemented.

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