10.1 C
New York

Ethereum Foundation says Merge will not reduce gas fees


Expected to reduce the network’s energy consumption by 99.5%, the Merge is one of the most highly anticipated upgrades. However, news from the Ethereum Foundation says that the upgrade will not reduce transaction costs. 

In an announcement made on the Ethereum website, the Ethereum Foundation set a clarification stating that the Merge will not reduce gas fees. 

“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.”

Merging the Ethereum mainnet with the Beacon chain to fully integrate a proof of stake consensus across the Ethereum ecosystem, will alleviate much of the energy consumption, and provide higher scalability for its platforms. With a tentative date set for September 19th, it is a development almost three years in the making.

 ETH traders have taken to investing more into their ETH wallets, presumably under the impression that the network’s capacity will surge post Merge. 

Users will be able to sync self-verified copies of Ethereum with no initial staking requirements. However, users will not be able to withdraw staked ETH until the Shanghai upgrade launches. Liquid ETH will be rewarded as fee tips and will be available as the mainnet upgrade launches. 

After the Merge, there will not be a significant increase in speed. Post Merge, however, PAR yields are anticipated to reach up to 50% net.

Related articles

Recent articles