The eagerly anticipated Ethereum Merge will revolutionize the cryptocurrency industry by introducing a new, less carbon-intensive method of blockchain transaction verification.
- The Ethereum Merge is anticipated on or around September 15, 2022;
- EQIFi fully supports Ethereum’s Proof of Stake upgrade;
- During the Merge, EQIFi will suspend for 48–72 hours new ETH and ERC-20 token transactions as a precaution and to guarantee the security of money;
- Binance Smart Chain blockchain may also suffer from operational suspension during the Merge;
- Your assets will remain secure, as always. Our users are not required to take any action.
The Ethereum Network (ETH1/Execution Layer) will soon be merging with the Beacon Chain (ETH 2/Consensus Layer) to become Ethereum 2.0. The Beacon Chain is a separate network running in parallel to Ethereum. Currently, Ethereum uses a proof of work model to validate blocks, a paradigm, where validators compete in order to produce the next block. After The Merge, Ethereum’s blocks will be produced only through the Beacon Chain leveraging a proof of stake model. Ethereum’s proof of work model will be discontinued permanently. All block validating work will be actively coordinated by the Beacon Chain, which will choose validators at random.
Image source: https://blog.ethereum.org/2022/08/24/mainnet-merge-announcement
Why is Ethereum swapping from PoW to PoS?
PoW requires miners to solve complex cryptographic functions, a process famous for being hardware and energy-intensive. On the other hand, PoS requires validators to hold and deploy ETH tokens to secure the network. Ethereum’s transition to proof of stake will bring numerous benefits, including improved efficiency, scalability, and security, as well as reduced centralization.
Increased energy efficiency
By removing the requirement for specialized hardware and decreasing the entry barriers for validators, the switch to a PoS consensus process is anticipated to cut network energy usage by 99.95% while also enhancing network decentralization and security.
Less dependency on performant hardware
Currently, Ethereum’s proof of work algorithm heavily relies on graphics cards with high output. In addition to being expensive to replace, reliance on them results in unforeseen supply chain dynamics dependencies. On the other hand, following The Merge, anyone with a regular laptop may take part in safeguarding the network, making the necessary gear far more accessible.
Decreased centralization risk
Anyone may become a staker without the need for specialized technology, therefore the the more stakers the chain has, the more durable it becomes. Thus, scaling becomes a minor factor due to lower power consumption and simpler hardware needs.
More robust against attacks
Economic sanctions for misconduct in the form of “slashing” make it considerably more expensive for bad actors to undertake assaults compared to proof of work. Attackers can be removed from the staker pool, and can only be added back after a few weeks.
New scalability possibilities
With the foundation for sharding in place, it will enable a more coordinated environment that opens up new opportunities for scaling.
Until the following Shanghai update permits withdrawals from the staking contract, anyone who wants to operate their own validator client in exchange for ETH-denominated payouts must stake and lock at least 32 ETH (about $50,000 at the time of writing). Validators had frozen a total of 13,190,533 ETH as of August 1, 2022 to secure the network.
How will it affect you as an EQIFi user?
EQIFi has taken the following steps to ensure the safety of users’ funds during the Merge and a potential hard fork:
Deposits & Withdrawals
EQIFi will take a similar approach to other crypto exchange platforms. We will suspend deposits and withdrawals for ETH and ERC-20 tokens for 48–72 hours while the Merge takes place.
Please note that the Binance Smart Chain blockchain may also incur deposits and withdrawal suspensions during the Merge.
Before we halt withdrawals and deposits, please make sure you give your ETH and ERC-20 token transactions enough time to complete. For users holding ETH and ERC-20 tokens on EQIFi, we will handle all technical requirements.
Regarding the Merge
If no new coin is formed, EQIFi will promptly reopen ETH and ERC-20 token deposits and withdrawals. In-app notifications will keep you updated in the event of any modifications you need to be aware of.
In the event of a fork and a new generated token, the “ETH” ticker will be used for the Ethereum PoS chain.
Please be advised that, should the chain split actually happen, EQIFi may change how the chain split is processed moving forward.
We believe in the Ethereum network and feel that the crypto industry is going to benefit from the revolutionary shift from Proof-of-Work to Proof-of-Stake. Although we may go through some growing pains, we are on the path to becoming the solution to all global financial needs.
Thank you for your support in building the future of finance!
The EQIFi Team
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This announcement may be modified, changed, or canceled at any moment and for any reason without previous notice at EQIFi’s sole discretion.
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