We are close.
In a week filled with lunacy, Ethereum holders can take comfort in the fact that The Merge is close.
In our first article, we take a look at where testing of the upgrade codenamed Bellatrix (The Merge) is at and also what milestones give us some very distinct hints that the timeline to the update is shortening.
On 6th May Teku Founder and Lead Tech, Ben Edgington kindly provided his notes from the Consensus devs call. In those notes, he gave a peek into the next stage of testing, moving from shadow forks to merging the public testnets, most likely starting with Ropsten.
Ben hinted that it would be wise to have the Beacon Chain running on Ropsten for a week or two prior to Ropsten being merged. PoS Implementers’ Call #86 – 2022-05-05
Prior to a TTD being announced for Ropsten we can assume that once the beacon chain nodes are live we could see Ropsten being merged perhaps in a 2 week window.
Just 10 hours ago that process started, it is a very very encouraging sign.
During All Core Developer (ACD) Meeting 137 Parithosh suggested that the outcomes of Shadow Forks 1 and 2 were slightly below where he would like testing outcomes to be in order to transition to public test networks with the degree of comfort everyone wants.
The difficulty bomb was discussed with a number of advocates agreeing to possibly delay the bomb due to the anxiety impacts. However, the voice of reason Danny Ryan pointed out this would then create a different set of issues with a larger potential impact, so a wait and see approach was adopted.
As Vitalik pointed out earlier in the call, Ethereum has experienced long block times previously and the world didn’t end.
Significantly delayed blocktimes are not currently expected to start appearing until well into August, even if the bomb is triggered. Blocks per week as an indicator of the difficulty bomb
Shadow fork 3 went well, according to Marius Van Der Wijden, who tweeted on May 5.
Looks very good, no major issues. We arrived at the stage where only things like race conditions kick nodes off the network. So we can really get the testing going now!
— MariusVanDerWijden (@vdWijden) May 5, 2022
If #4 goes as well as #3 we can hope that the bar has been lifted high enough for the team to agree that testing is ready to progress to Ropsten, leaving just Goerli and Sepolia before Mainnet.
Given that the beacon chain nodes for Ropsten and Sepolia are now in issue that is looking very likely.
Roll on Shadow Fork 4, expected to happen on 12th May.
Coincidentally, the outcome of shadow fork 4 will be known just before the next ACD, on Friday 13th May where we hope Ropsten will be confirmed as the next public testnet to experience the Merge.
On the network front the very early stages of the Difficulty Bomb effects are starting to be felt.
Average block time increased to 13.59 seconds on Tuesday 10th May, that is notwithstanding a significant jump in hash rate to an all-time high of 1,098,991 Gh/s.
Why the jump in hash rate so close to The Merge? A recent unlock of Nvidia’s LHR is likely the cause. This jump also gives us some good insight into how many LHR cards must have been sitting restricted in the network.
With the Merge set to take place on Shadow Fork 4 on 12 May and ACD call the day after the community should have some very clear guidance on what the next steps are to reach the merge and much more clarity about a timeline.
In recent upgrades there has been a one week delay between updating public testnets. We can look to the London Hard Fork that introduced EIP1559 as an example.
Testing history of the London Hard Fork including EIP1559.
24 June 21 – Ropsten
30 June 21- Goerli
7 July 21 – Rinkeby
5 August 21 – Mainnet
Once Ropsten is announced the community will have a very clear guide on the most frequently asked question. Wen Merge?
Given these timeframes and based on the progress of existing testing we can expect the Merge is extremely likely to happen in the July/August window, perhaps favouring earlier rather than later unless any significant hurdles come up.
With the transition to Proof of Stake comes a significant drop in issuance, estimated to drop to 1300 ETH per day.
Also coming is an expected doubling of staking rewards. This brings us to some very significant changes in tokenomics, especially where withdrawals of staking rewards are touted as not being enabled until the next update which may not happen until 2023.
This means,
- no new ETH will enter circulation post merge for possibly 6 months.
- ETH will continue to be burned so the deflationary effects of EIP1559 are going to felt significantly more.
- With staking rewards initially at 10% there is likely to be a significant increase in staking, further reducing available supply.
- A power consumption reduction equivalent to the use of the Netherlands or UAE!
We are entering one of the most exciting periods in the history of crypto.
As the saying goes, no one owns enough ETH before the merge.
