Gate.io’s Guide to the Ethereum Merge: Hard Forks, Staking, and HODLing
Ethereum is about to reach a huge milestone in its development. The Merge is an upcoming upgrade to Ethereum that will replace the proof-of-work (PoW) model with a proof-of-stake (PoS) model. The upgrade is expected to complete sometime between September 10th and 20th.
Basically, the upgrade is intended to make Ethereum more efficient and is designed to be a seamless transition. However, the Ethereum blockchain’s history, such as user wallet balances, will remain the same.
What do ETH holders on Gate.io need to do?
Gate.io users are not required to take any actions before the upgrade. The Merge itself will not affect users’ ETH balance– ETH will still be ETH. However, there is a chance of a hard fork, and Gate.io is taking steps to ensure users have the opportunity to participate. As a result, users may need to take some actions concerning a potential hard fork.
Why is a hard fork being proposed?
After The Merge, miners earning income from Ethereum’s PoW mechanism will no longer be needed to secure the network. This change has led several members of the Ethereum community to propose a hard fork. In this context, a hard fork means that an alternative PoW version of Ethereum will split from the mainnet and run in parallel.
So, the upgraded Ethereum would still be Ethereum. But, at the same time, a separate forked PoW chain would be created and exist under a different name and ticker.
How can I prepare for a fork?
There is no certainty that a hard fork will occur, but if you want to be prepared, there are actions you can take on Gate.io. Currently, ETH can be swapped on Gate.io for equal amounts of ETHS and ETHW (1 ETH = 1 ETHS and 1 ETHW).
- ETHS represents the token for the upgraded Ethereum (PoS).
- ETHW represents the token for the potential forked chain (PoW).
Gate.io will take a snapshot of users’ account balances before the upgrade. If a hard fork occurs, ETHS will be delisted and automatically be swapped 1:1 for ETH, and the forked PoW chain with the highest hashrate will represent ETHW, which may be renamed if required.
What if there are no successful forked chains?
If a hard fork of Ethereum does not materialize, then ETHS and ETHW will be delisted, and users will need to swap ETHS and ETHW back into ETH (1 ETHS + 1 ETHW = 1 ETH).
What The Merge means for Transaction Speed, Fees, and Staking?
The more immediate advantage of The Merge is that Ethereum will become a more efficient and less energy-intensive blockchain, but how will it affect transaction speed, gas fees, and Gate.io’s ETH staking?
- Transaction Speed & Gas Fees: In terms of on-chain transaction speed and gas fees, these will remain relatively similar to pre-Merge Ethereum. But, The Merge sets the stage for future upgrades that address existing scalability problems.
- Staking: Although staking is available on Ethereum, ETH staked on-chain cannot be withdrawn. However, the Shanghai upgrade is expected to launch around 6 to 12 months after The Merge, enabling the withdrawal of staked ETH on-chain.
Currently, there are flexible and convenient ways to stake your ETH on Gate.io, offered as the ETH2 token, which distributes staking rewards to holders.
Supporting all voices in the crypto community
With The Merge being one of the most significant upgrades ever in Ethereum’s history and the likelihood of a forked chain emerging, Gate.io is taking all necessary steps to ensure users have a safe and worry-free experience. If anything changes in the coming weeks, Gate.io will provide updates via Gate.io’s announcement page.