Although Ethereum developers promised that there would be no downtime during The Merge, one of the most anticipated Ethereum upgrades, members of the crypto community decided to take proactive measures to ensure the safety of investors’ funds. In this effort, the cryptocurrency exchange FTX announced a stop to all Ether (ETH) transactions on various blockchains until the end of the September upgrade.
The Merge upgrade will permanently move the Ethereum blockchain from the proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism – which aims to reduce power consumption and bring features of sharding in.
According to the Ethereum developers, Merge is designed to switch to PoS without any downtime thanks to Total Terminal Difficulty (TTD), which will switch based on the total mining power used to build a chain. Despite this explanation, FTX chose to “suspend deposits and withdrawals until the Merge upgrade is complete and the networks are stable”.
As the ETH merge approaches, FTX will temporarily disable blockchain transfers of secondary chains for ETH to ensure the settlement is clean; Mainchain ETH transfers will remain active for longer.
Details: https://t.co/iVUjo4ZqyO
—FTX (@FTX_Official) September 5, 2022
As the ETH Merge Upgrade approaches, FTX will temporarily disable secondary blockchain related transfers for ETH to ensure the setup is clean; ETH transfers from major blockchains will stay active longer. Details: https://t.co/iVUjo4ZqyO — FTX (@FTX_Official) September 5, 2022
The suspension of transactions for Ether on different blockchains is assigned to start at different times, but it is still subject to change depending on the expected difficulties.
FTX also pointed out that the cryptocurrency exchange is not responsible for losses in case of large price fluctuations, adding that “it is your responsibility to understand the implications of this announcement”.
Also Read: Merger: Top 5 Misconceptions About Ethereum Early Upgrade
Clarifying one of the biggest misconceptions surrounding the Merge upgrade, the Ethereum Foundation clarified that it will not reduce transaction fees. Here is the official statement:
“Network demand versus network capacity results in transaction fees. Merge deprecates Proof of Work and moves to Proof of Stake with consensus, but does not significantly change parameters that directly affect network capacity or throughput.”
Instead, the upgrade aims to eliminate the need for power-intensive mining altogether.
