Ethereum clarifies Upcoming Merge Will Not Reduce The Amount Of Transaction Fees

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The Ethereum Foundation has clarified that the upcoming upgrade, called “Merge”, will not reduce the amount of transaction fees.

Specifically, it was officially positioned as follows:

“Transaction charges are a product of network demand relative to network capacity. The ‘Merger’ removes the use of the proof of work mechanism and moves to the proof of participation mechanism for consent, but does not significantly change any parameters that directly affect network capacity or throughput.”

Ethereum Foundation

The “Merge” upgrade seeks to merge Ethereum’s existing mainnet with the new proof-of-participation consensus layer, the Beacon Chain and will therefore eliminate the need for ETH mining, saving energy.

The upgrade is expected to take shape in September 2022. While many investors and traders have purchased ETH in anticipation of the upgrade, “Merge”, some appear to have done so under the misconception that network capacity will increase once the upgrade is implemented.

About staking in Ethereum

Regarding staking on the Ethereum network, it is clarified that it is not possible to immediately withdraw ETH that has been staked on until the “Shanghai” upgrade is completed. However, ETH rewards to those who have staked will be immediately available.

Withdrawals from the validation program, once initiated, will have certain restrictions to avoid a potential liquidity crisis on the network.

The speed of transactions

Trading will also not be significantly faster after the “Merger”. However, APRs after the merger on the network are expected to increase by 50% compared to now to attract capital. Customer developers are currently working on a trial deadline of September 19 to complete the “Merge,” which is designed to have zero network downtime during the transition.

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