The Merge refers to a process in which the Ethereum network will change its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The aim of this upgrade is to improve the network’s long-term scalability, security and sustainability.
The merge involves swapping out Ethereum’s PoW consensus method with PoS. The Ethereum community has been running PoS consensus for Ethereum for nearly two years as a separate chain called the Beacon Chain. The Ethereum execution layer (where the EVM, dapps, and users live) will remain the same, but the consensus layer will now leverage PoS instead of PoW.
Please note that post merge the network will continue to be called Ethereum and use the ETH token.
The Merge is expected to occur on September 14th or 15th, 2022. The community maintains a site estimating the exact time here.
Post merge, any ETH you have staked including accrued staking rewards will remain locked on the Beacon Chain without the ability to withdraw. Withdrawals are planned for the Shanghai upgrade, the next major upgrade following The Merge. This means that newly issued ETH, though accumulating on the Beacon Chain, will remain locked and illiquid for at least 6-12 months following The Merge.
If you would like to obtain liquidity on your staked ETH sooner, you have the option to wrap your Coinbase staked ETH for cbETH until the Shanghai upgrade is complete. Note that the price of cbETH is determined by the market. To learn more about cbETH please visit our help center article - using cbeth.
Though some slight changes may exist, transaction speed will mostly remain the same on the Ethereum Mainnet. During the next phases of the upgrade, Ethreum plans to introduce new techniques (such as sharding and rollups) that will enable the network to spread its computing load across multiple chains in order to alleviate congestion.
These upgrades are designed to help the Ethereum Mainnet support thousands of transactions per second while reducing gas fees.
No. Gas fees are expected to remain the same after the Merge. To learn more you can visit ethmerge.com.
During the Merge, Coinbase will briefly pause new Ethereum (ETH) and ERC-20 token deposits and withdrawals as a precautionary measure.
Although the Merge is expected to be seamless from a user perspective, this downtime allows us to ensure that the transition has been successfully reflected by our systems. We do not expect any other networks or currencies to be impacted and expect no impact to trading for ETH and ERC-20 tokens across our centralized trading products.
You will be informed via Twitter and the status page when ETH and ERC-20 tokens are available for deposits and withdrawals.
It’s important to always be on high alert for scams, but especially leading up to the Merge. We recommend you don’t send your Staked ETH to anyone in an attempt to “upgrade". Your assets will be safe and secure during this period and no action is required to upgrade on your part.
For users who hold ETH on self-custody wallets like Coinbase Wallet or Metamask, we recommend exercising caution before signing any transactions relating to airdropped tokens, especially any airdrop purporting to be ETHPoW tokens. Scammers may send fake tokens to random wallets in an attempt to steal your funds once you approve the transaction.
If a new token is airdropped to your wallet after the merge, make sure to first review the contract address and check official social media channels before taking any action.
It is recommended that you refrain from connecting your self-custody wallet to the EthPoW network (or the network of any other chain fork of Ethereum). Transactions on such networks may lead to the loss of your funds on the main Ethereum network.
Sometime after the Merge, you will find your staked ETH balance under your Ethereum (ETH) wallet on the platform. Your staked ETH will be listed separately from any staked ETH or dapp wallet ETH balance you might be holding.
Staked ETH balances won’t be unlocked at the time of the Merge or be available to trade or transfer until the Ethereum protocol upgrade completes. The upgrade is anticipated to be completed by early 2023.
At Coinbase, our goal is to list every asset that is legal and safe to list, so that we create a level playing field for all the new assets being created in crypto while continuing to protect our customers.
Should an ETH PoW fork arise following The Merge, this asset will be reviewed with the same rigor as any other asset that is listed on our exchange.
Every exchange, including Coinbase, uses a safety parameter called `block confirmations` to ensure users are able to safely deposit and withdraw funds. This value is set per network based on each network's unique security properties and expresses our confidence that the network will not be reorganized.
Today Coinbase requires 14 block confirmations on Ethereum before crediting a users deposit on the exchange. Post-merge, we are temporarily increasing the block confirmation count to 85 blocks, or about 17 minutes.
Although we expect Ethereum to be significantly more secure post-Merge, we are taking this precautionary step to protect user funds. Our goal is to observe network behavior and gather data post-merge so that we can safely lower the block confirmation and provide our users the best experience possible.
