THE MERGE: 1/21 Ethereum is about to get a series of enhancements that will differentiate it from other blockchains, especially Bitcoin. This thread hopes to lower the gap of asymmetric information towards what The Merge means and how close it is to change the blockchain space
2/21 The Merge is a network upgrade in the Ethereum that aims to swap the actual consensus layer from proof-of-work (PoW) with a more energy friendly, capital efficient and way more secure proof-of-stake (PoS) consensus.
3/21 By this time, I hope you already know what PoS is. If you still don’t know why PoS better align economic incentives than PoW, you can check this other thread.
4/21 First of all, is important to mention that as a regular user, your experience with Ethereum won’t change. The merge is an upgrade in the consensus layer of the network, while the data/application layer won’t be affected.
5/21 This means that every dApp, protocol or account that existed before the merge will continue to exist and act in the exact same way as before. Furthermore, transaction pool management will be already running through EIP1559 rules and “The Merge” won’t alter it either.
6/21 The merge will only affect how the validators (which replaced the figure of the miner), get to an agreement on which transactions will be part of the canonical history of the blockchain.
7/21 What has not been internalized yet is that PoS IS ALREADY A REALITY. All the heavy lifting of researching, specifying and developing a novel consensus mechanism is already fully done in the “Beacon chain” AKA Eth2 network.
beaconcha.in
8/21 The Beacon chain is a fully independent network which runs a PoS consensus layer. It is operating in parallel to the current Ethereum mainnet and only handle the consensus layer of the protocol, while its data/application layer is empty.
9/21 Keeping a PoS chain siloed from the main network was necessary so that no risk from a novel consensus mechanism could impact the Ethereum chain during its deployment. Now the Beacon chain has been running smoothly since its launch on nov/2020, without any issue.
10/21 The new Ethereum PoS consensus layer has ~120k validators, with almost 3.8mi ETH (or 3.3% of the circulation supply) at risk, so it’s now archiving a good level of Lindy effect so that the core is satisfied that it is safe to merge it with mainnet.
11/21 The changes required for the current Ethereum network to swap to PoS is a protocol integration between the data/application layer with the already existing consensus layer to: Include blocks in the data history; Propose new blocks; Signalize/finalize blocks heads.
12/21 Those are a narrow changes to both Eth1 and Eth2 clients in which 3 beacon chain clients have already demonstrated performing Eth1 transaction in an Eth2 environment. Teku: https://t.co/f1rbnuofAU Lighthouse: https://t.co/MSZgoOVBYb Prysm:
13/21 The expectation is that sometime in end Q4 2021 or early Q1 2022 we will be ready to do “The Merge”, just after Berlin and London upgrades that will take place in 2021.
14/21 “The Merge” will fulfill the second crypto-economic improvement to $ETH as an asset, condensing years of crypto-economic research and development which will give ETH ultra sound money properties. https://t.co/G37gpkgMKD @BanklessHQ @TrustlessState @drakefjustin
newsletter.banklesshq.com/p/ultra-sound-…
15/21 With the end of PoW, Ethereum will experience “The Cliffening”, an issuance rate reduction by roughly 90% at the time of "The Merge". Just to contextualize, it will take an additional 12 years for this reduction be matched by Bitcoin “Halvenings”.
16/21 Together EIP1559 and PoS will make ETH a deflationary asset.
17/21 Although this may sound like magic, you don’t need the same courage as the Vanuatu divers to believe in “The Cliffening”. In PoS bad actors are penalized for their harmful behavior with stake burn, or a negative reinforcement on their actions.
18/21 Since participants have less wiliness to be malicious, the network positive reinforcement (block issuance) can be lowered despite having a higher security level.
19/21 Besides already being the public blockchain with most value processed as well as the public blockchain with by far the most development activity, the next upgrade will make ETH a premium SOV asset.
20/21 I would like to thank all the community member that release newsletter that keeps people like me informed: https://t.co/4bvMlsRhu7 @evan_van_ness https://t.co/njd34b1XSN @benjaminion_xyz
weekinethereumnews.com
eth2.news
blog.ethereum.org
21/21 Additional answer to “The Merge”can be found at https://t.co/BtDfE7hEeL. This thread was inspired by them.
ethmerge.com
