The Merge on ETH - Things to Note

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The Merge

Those who are dabbling crypto projects or tokens on ETH chain will have heard about The Merge. This simply refers to Ethereum blockchain transition from Proof of Work (PoW) to Proof of Stake (PoS) some time between 10 Sep 2022 to 20 Sep 2022. Short of explaining the technicality behind it, I will like to highlight a few areas which crypto-enthusiasts should note.

No reduction in gas fees

I noticed a few friends asking me about the hype and whether if its because gas fees will finally be lowered. I will reiterate, The Merge does not reduce gas fees. Its key benefit is in the reduction of energy consumption because it allows stakers instead of miners to perform validation.

No downtime during The Merge

Take a deep breath and calm down. The process is seamless even though it involves network upgrade and execution layer transition. During then, the slowness which you may experience (if any) is likely due to a spike in blockchain activities by speculators or panic buyers/ sellers.

Risks of CEX ETH during The Merge

Two risks I foresee,

• briefly mentioned in my previous paragraph, on-chain activities may be high due to speculations. Arising from this, some centralised exchanges (CEX) may temporary cease ETH blockchain activities to minimise trading risks. (You can check out Binance announcement on this here)

• you may lose out on receiving airdrops from ETH PoW believers. This group are the ones whom are at risk of losing value to their ETH mining rigs/ farms and are hence working on developing a Fork Ethereum to create a new cryptocurrency, ETHPoW. If the fork is successful, ETH holders on non-custodial wallet such as Metamask will qualify for ETHPoW airdrops.

As always, this article is my own view and should not be treated as financial advise. Personally, I'm not taking any actions to leverage on The Merge because I hold very little ETH and also don't think there is any opportunity to ride on. Being a curious person in the cryptoworld, I will continue reading up more on The Merge as this is a historical milesone for the Ethereum blockchain.

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