Ethereum’s developers, headed by the network’s founder, Vitalik Buterin, have been working towards ETH 2.0 to switch the platform to a proof-of-stake consensus.
What is the Ethereum Merge?
When the Ethereum network was initially created, the Beacon Chain protocol was separated from the Mainnet, with the latter being what Ethereum currently uses. Ethereum’s mainnet runs through a proof-of-work consensus, while Beacon Chain continues running through a PoS system.
One of the proposals for achieving a better Ethereum is merging these two chains. The merge will happen after the developers are ready for the transition. It will allow the network to become its own shard that uses a PoS mechanism.
This merge will allow the mainnet to run smart contracts using a PoS system, ensuring a smooth transition for all ETH users and holders. However, the merge will not come with most of the benefits related to ETH 2.0 as many users would wish. This means that users who want to benefit from features such as lower fees and withdrawing staked ETH will have to wait longer.
What Will Bring Lower Ethereum Fees?
There are many proposals included in the roadmap toward achieving ETH 2.0. One of these proposals is increasing the number of transactions that the network can handle per second. These transactions will be increased to around 150,000 transactions per second, and ETH 2.0 seeks to achieve this and boost the network’s security.
Sharding is expected to increase the number of transactions the Ethereum network can handle. Through sharding, transaction validation will be assigned to different validators operating different shards.
The cause of the high gas fees on the Ethereum network is congestion on the network. With the Eth2.0 upgrade increasing the transaction processing speeds, congestion will be reduced significantly, thus in theory lowering the transaction fees.
The high gas fees on the Ethereum network are not only a problem for the network’s users, but they also inhibit the development of decentralized finance (DeFi) networks on the platform. If the developers can successfully bring the ETH 2.0 upgrade, it will be a great thing for the entire DeFi sector.
However, this upgrade needs to come up fast because many networks are now available in the market that offers higher speeds and lower fees than Ethereum. Delaying it could lead to major DeFi migration from the Ethereum network.