Ethereum Foundation Clarifies Upcoming Merge Upgrade Will Not Reduce Gas Fees

The merger will further reduce grid power consumption by approximately 99.5%.

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According to a new clarification from the Ethereum Foundation on Wednesday, the network’s upcoming transitional proof-of-stake upgrade — dubbed the “merger” — will not reduce gas fees. On this subject, the Ethereum Foundation wrote:

"Gas charges are a product of network demand versus network capacity. Merge deprecates use of proof-of-work, moving to proof-of-stake for consensus, but does not change significantly the parameters that directly influence network capacity or throughput."

The merger, which seeks to join the existing execution layer of the Ethereum mainnet with its new proof-of-stake consensus layer, the Beacon Chain, will eliminate the need for energy-intensive mining. It is expected to land in the third or last quarter of 2022. While many investors and traders bought Ether in anticipation of the Merge upgrade, some seem to have done so in the mistaken belief that network capacity will increase. once online upgrade.

For starters, anyone is free to sync their own self-verified copy of Ethereum or run a node, with no initial Ether staking requirements. Regarding staking, it is not possible to withdraw staked Ether until the next Shanghai upgrade goes live. However, liquid ETH rewards in the form of fee tips will be available immediately. The validator's withdrawals, once online, will be limited to avoid a possible liquidity crisis.

Transactions will also not be noticeably faster after the merge. However, post-merger APR returns on the network would have to increase by 50% from now to attract capital. Client developers are currently working on a tentative deadline of September 19 to complete the merge, which is designed to experience no downtime during the transition.