After a few weeks of speculation, Ethereum core developer Tim Beiko confirmed in a tweet Tuesday that the long-awaited Ethereum Merge will come later than expected. Instead of June, Beiko said that the network's transition to proof-of-stake is more likely to come “in the few months after.”
Beiko insisted that Ethereum was “in the final chapter of PoW,” but this is yet another in a long string of delays for a project which was slated for completion as far back as 2019.
The update comes after Ethereum passed a major milestone on Monday with the first shadow fork of the Ethereum mainnet – amounting to a dry run of the network’s upcoming shift in consensus mechanisms.
However, according to a tweet last weekend from Ethereum DevOps engineer Parathi Jayanathi, three recent shadow forks of Ethereum's Goerli testnet revealed bugs that still need to be worked out before the update will be ready.
The Merge signifies Ethereum’s shift to a proof-of-stake (PoS) mechanism for securing itself. Today, the network relies on a resource-intensive proof-of-work (PoW) system similar to that of Bitcoin, whereby a decentralized network of computers competes to validate transactions.
Ethereum’s move to PoS, where users reserve the ability to secure the network by “staking” ether, is expected to cut the network's energy costs by 99% and make it easier for Ethereum to scale.
Building out a new consensus mechanism for Ethereum, though, comes with significant complexity. In addition to introducing a host of engineering challenges, Ethereum’s PoS model will add a new set of game theory mechanics to ensure network validators act in good faith.
With billions of dollars on the line, a misstep would be catastrophic for the whole ecosystem.
Shifting Focus to Layer 2
Even after the Merge, Ethereum's high gas fees and relatively slow speeds – which have made the network unusable for many applications – are likely to remain.
Ethereum is at the center of decentralized finance (DeFi), GameFi, and NFTs, but a large number of newer PoS chains are nipping at Ethereum’s heels by offering users faster and cheaper transactions.
The Merge has supplanted Ethereum’s original plans for “Ethereum 2.0,” which included the addition of sharding to improve network throughput by chopping up activity into pieces that can be processed simultaneously. Sharding is still on the Ethereum roadmap, but it was pushed back to 2023 in order to expedite the shift to PoS.
With this in mind, much attention within the Ethereum developer community has shifted to layer 2 rollups like Arbitrum, Optimism and Loopring, which have amassed billions of dollars in total value locked onto their third-party solutions for scaling the Ethereum network.
Even after the Merge, a growing portion of network activity is expected to move over to these layer 2 networks, which process transactions on separate blockchains before bundling them up and passing them back down to the Ethereum base layer.
While Layer 2 solutions each have unique advantages and disadvantages relative to Ethereum, they tend to be much faster and cheaper than the base layer while still containing essential security guarantees.
Ethereum's native token, ether (ETH) is the second-largest cryptocurrency. At press time, it had a $365 billion market cap and was trading at $3,100, down from around $3,500 earlier this month.
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