The Ethereum Merge
What you need to know, what you should ignore, and what our team is doing to counteract the changes
The time has come for one of the largest milestone’s in blockchain development history: the Ethereum Merge. Despite the large amount of press around this momentous event, there are still a lot of questions around what it is and how it will affect the greater crypto community. So let’s take a couple minutes to quickly discuss:
- What is the Merge?
- When is it taking place?
- How will the Merge affect Wyre partners?
What is it?
Formerly known as ETH2 or ETH 2.0, the Ethereum Merge will be the merging of the Beacon Chain’s Proof-of-Stake (PoS) consensus method with the EVM state of the Proof-of-Work (PoW) chain.
Ethereum has been operating on its PoW chain since its inception in 2013, and the merge will be the moment when the Beacon Chain (where the new PoS mechanism has been being tested) will be integrated with the ledger of the PoW chain.
This merge is the most technologically advanced update that Ethereum, and the greater ecosystem, has ever received and one of this scale has never before been attempted. The Ethereum developers have been developing and testing the new PoS mechanism for the past 20 months in order to iron out bugs and ensure the smoothest transition possible.
Let’s address some of the common headlines you may have been seeing and determine which are true:
- The Merge will lower transaction fees: FALSE. The Merge itself will not noticeably affect gas fees. The Merge does however set the stage for future improvements to the network, such as sharding, that may ease fees. The Ethereum foundation will also rely on Layer 2 technologies (ie Polygon or Loopring) to help optimize gas fees while maintaining decentralization.
- Faster transaction speeds: NEGLIGIBLE. The current block settlement time is around 13.5 seconds. Post-merge, the block settlement will be set at 12 seconds. While this does sound like a noticeable improvement, the average user will not notice any change in their Ethereum transaction speeds.
- Better security: TRUE. The Merge will usher in a new penalty system for any malicious actors attacking the Ethereum chain. This new system will employ slashing and validator shuffling to ensure that any attempts on the ETH network will be thwarted, unrepeatable and punishable.
- Less energy consumption: TRUE. Due to the move away from rewarding miners for expending huge amounts of computing power, the energy consumption of Ethereum is going to decline by about 99.95%.
- Future scalability: IT’S COMPLICATED. Future scalability is a long term focus of Ethereum. While the Merge lays the groundwork for improvements, the sharding mechanism is not scheduled to be rolled out until 2023 (if things go to plan). As mentioned earlier, Ethereum will rely heavily on Layer 2 solutions to improve transaction throughput until sharding is ready.
- The Merge will result in a new token called ETH2: FALSE. All existing tokens and assets that currently exist on Ethereum will exist exactly as before the Merge. Ether, Ethereum’s native token, will keep the same ticker symbol of ETH.
So, when is this going down?
As of this writing, the estimated merge date is September 14, 2022. The reason this is an estimate is because the merge is not set for a specific day and time, but for the moment when the PoW chain hits what is being called Terminal Total Difficulty (TDD). This will be when the difficulty of mining a block reaches a predetermined difficulty level, and the following block will be the first one mined via the PoS mechanism. (For more detailed information of how the difficulty of mining an Ethereum block has been slowly increasing over time, read here.)
According to the Ethereum organization, when this difficulty will be reached “is dependent on the network hash rate which is volatile. If more hash rate joins the network, TTD will be reached sooner. Similarly, if hash rate leaves the network, TTD will be reached later.”
It is a bit of a moving target, but to keep track, check out this awesome countdown: Wen Merge?
How will it affect Wyre partners?
The merge has been described as similar to changing the engine of a car from gas to electric while the car is moving. Although the Merge is designed to seamlessly transition to PoS without any downtime, Wyre wants to be sure to take the necessary precautions to protect its partners and end users.
Alongside many other platforms, exchanges and dapps, Wyre has decided to briefly pause all on chain transactions for a short period during the Merge starting at 10:00 PM EST, September 14th.
This means that Wyre will temporarily pause the following:
- Swaps to/from Ethereum assets
- Wallet orders for Ethereum assets
- Withdrawals of Ethereum assets
We have also put together some frequently asked questions that we have been receiving from our partners.
Partner FAQs
Will there be downtime?
The majority of Wyre’s services will continue to function normally. However, we will be temporarily disabling all of our Ethereum-related functionality. To reiterate, this includes:
- Wallet orders for Ethereum assets
- Outgoing transfers of Ethereum assets
- Swaps to/from Ethereum assets
The Merge can cause downstream issues and we want to ensure that our system successfully transitions before we re-enable the above.
When will the pause of transactions begin?
We will pause transactions approximately 3 hours before the Merge is expected to occur.
When will Wyre’s Ethereum service be back up?
We’ve prepared an internal checklist of items that we must validate before we turn the disabled functionality back on. We are refraining from predicting a time frame as it depends on a number of factors.
How will Wyre keep partners updated during the Merge?
On the day of the Merge, Wyre will have employees manning our Discord server to answer questions that our partners may have. Wyre will be also posting on our Twitter, Discord and Telegram, any updates including when we pause Ethereum transactions, when we will re-enable them, and any necessary updates in between. Also, you will be able to view real-time notifications on our status page.
How should partners prepare?
We suggest that all partners take action of their own to protect themselves and their users. We recommend to do the following in their user interface:
- Disable deposits into Wyre wallets. Ethereum Deposits will not be credited during this time.
- Disable withdrawals out of Wyre wallets
- Disable swaps to/from Ethereum assets
Any Ethereum assets sent to Wyre during this time may be lost
Which testnet will we be using?
Wyre will be migrating to the Goerli tesnet. We were previously leveraging the Kovan testnet, but it will no longer be supported post-Merge.
We have deployed custom contracts for each of our testnet tokens. This way we can source our own liquidity for these tokens instead of relying on a third-party. All of our testnet tokens and their associated contract addresses are listed in our docs.
Will Wyre support PoW forks moving forward?
We will not be supporting PoW forks unless there is strong demand from our customer base. The two primary reasons to not support PoW forks are:
- Most of the ecosystem and community will be adopting the PoS chain.
- There are risks involved with interacting with PoW forks such as replay attacks.
More Resources
There are a lot of resources that are available, but here are a few to get you started:
Connect with our community & dev team on Discord to get answers to all of your integration questions.
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