Dawn is approaching: Ethereum merge is just around the corner
The goal of the Merge Ethereum upgrade is to switch the consensus mechanism, which will not have a direct impact on TPS. In the L2-centric scaling roadmap, the protocol layer is mainly used to ensure decentralization and security, while the task of scaling will mainly be undertaken by sharding and L2.Author: Jerry, Jiawei, IOSG Ventures
Key Takeaways
Last week, the merge was successfully implemented on the Ethereum testnet Ropsten, officially enabling PoS on Ropsten;
The merge on the Sepolia and Goerli testnets will take place in a few weeks;
If all goes well, the merge on the Ethereum mainnet is expected to occur between late August and November;
To align with the final mainnet The Merge, EIP-5133 proposes to restart the difficulty bomb on the mainnet in August;
Due to the gradual maturity of Layer 2 scaling solutions, Ethereum's focus has shifted from establishing shard chains to supporting the merge of the mainnet and the beacon chain. Shard chains are expected to gain support in 2023.
In the past few years, we have seen intense discussions in the community about PoW and PoS. However, one established fact is that Ethereum—the largest ecological network in the current crypto world—will soon transition from PoW to PoS. With the successful completion of the merge on the Ropsten testnet, the community is more confident than ever.
Ropsten Merge
On June 9, 2022, at midnight Beijing time, the Ethereum testnet Ropsten successfully completed the merge. Launched in 2016, Ropsten is the longest-running Ethereum testnet to date. According to Ethereum core developers, about 14% of validators experienced downtime during the merge process on Ropsten, mostly due to incorrect node configurations, which were quickly resolved. Additionally, the merge on Ropsten is considered nearly perfect and marks an important milestone in Ethereum's transition to PoS.
The merges on Sepolia (in about 3 weeks) and Goerli (in about 6 weeks) will follow. If everything goes smoothly, the Ethereum mainnet is expected to complete the merge between late August and November.
Despite criticism regarding environmental impact and energy consumption, PoW remains the most stable consensus algorithm in terms of operational time. In contrast, PoS has not yet undergone a long-term test. Especially for a large ecosystem like Ethereum, the potential impacts after migrating to PoS are issues we must consider.
For Ethereum developers, ensuring that their applications can operate normally after the merge is equally crucial. According to Ethereum's official statement, the impact of the merge on a subset of contracts is minimal, but considering the potential effects on front-end tools and other components, developers are advised to conduct a complete testing and deployment cycle on Ropsten and provide timely feedback on any issues.
The Path to the Merge
An ideal blockchain is characterized by sufficient transaction bandwidth, decentralization and security, as well as good energy efficiency. To achieve these goals, Ethereum has planned upgrades to the PoS consensus mechanism and scaling based on Layer 2 and Sharding. The recent merge on Ropsten is an important upgrade for Ethereum to address energy efficiency while enhancing decentralization and security.
The transition of Ethereum from PoW to PoS for energy efficiency has two key nodes: the Beacon Chain and The Merge.
Beacon Chain
The Beacon Chain allows nodes to become validators of the network by staking Ethereum tokens. The Beacon Chain is the foundational network for Ethereum's PoS consensus layer, officially launched in December 2020.
Before The Merge occurs, the Beacon Chain and the actual execution layer are separate. The state of the PoS consensus layer is maintained solely by nodes in the Beacon Chain but is not used by the blockchain itself. The state of the execution layer is maintained by PoW mining nodes, which also perform the functions of the consensus layer.
The Merge:
The Merge will enable the Beacon Chain as the consensus layer network for Ethereum's block production, replacing the consensus mechanism originally controlled by the PoW node network. The third block illustrated in the diagram below is the critical point of The Merge: the state of the execution layer is inherited from the original PoW network, while the consensus layer inherits from the PoS network. After this, Ethereum will smoothly switch to the PoS consensus mechanism.
Ethereum has designed a difficulty bomb mechanism to assist the transition from PoW to PoS. Once the difficulty bomb is activated, the mining difficulty of the PoW network will increase exponentially, ultimately leading to a freeze. As shown in the diagram below, Ethereum has experienced three instances in its history where the difficulty bomb raised block production difficulty.
After completing the merge on Ropsten, Ethereum will proceed along the path to initiate the mainnet merge. According to EIP-5133, the difficulty bomb to assist the Ethereum mainnet The Merge will be activated in August 2022.
It is worth noting that the goal of The Merge Ethereum upgrade is to switch the consensus mechanism and will not have a direct impact on TPS. In the Layer 2-centric scaling roadmap, the protocol layer is primarily used to ensure decentralization and security, while the task of scaling will mainly be undertaken by sharding and Layer 2.
Conclusion
From a narrative perspective, Ethereum's transition to PoS has the most intuitive impact of better sustainability (reducing energy consumption by over 99% compared to PoW), along with the scalability brought by sharding, which will be implemented in 2023.
The transition to an environmentally friendly PoS at least helps alleviate mainstream criticisms of cryptocurrencies, and after sharding is adopted, along with scaling infrastructure like Rollup, we can expect to see a more scalable Ethereum. We are entering a new narrative phase for Ethereum.
It has been a year and a half since the launch of the Ethereum Beacon Chain. During this journey, there have been several delays in development progress, but with the successful merge on the Ropsten testnet, we are getting closer to the merge on the Ethereum mainnet.
The merge is the most complex upgrade Ethereum has undertaken to date. In the diagram above, we can see that the finish line is very close. Reflecting on the live stream of the Ropsten Community Call, we truly felt the heartfelt excitement of the developers.
Although the market may be in a continued downward trend in the medium to long term, we are still excited about this milestone event and are full of confidence in the future of Ethereum.
