Ethereum Merging by September Bet Markets Say – Trustnodes

The ethereum upgrade to full Proof of Stake (PoS) is expected by September according to betting markets.

Close to $20,000 of liquidity on trading volumes of nearly $200,000 has 58% stating the Merge will happen by September 1 2022.

That goes to 82% by October, while only 2% say the upgrade will somehow happen by August 1st.

Yet 15% say that it won’t happen even by January 1st 2023, with some clearly in denial that ethereum’s biggest upgrade is now weeks away.

“As far as we know, if everything goes according to plan, August just makes sense,” Preston Von De Loon said.

Ethereum’s co-founder Vitalik Buterin concurred, stating the merge is likely to happen in August, or in September/October if any problems arise.

What sort of problem would arise is difficult to see at this stage. A merge testnet has been running since March. The fifth shadow fork went well. They’re upgrading a long running testnet in early June.

But they do have two further testnets to upgrade after that. They’ll probably set the live launch block number two weeks ahead. So these two other testnets will have to upgrade within about two weeks each to meet the end of August timeline.

Which is why the market is more sure it will happen sometime in September, and the network seems to be ready for it.

Prysm, which once dominated the ethereum 2.0 network, is now down to just above a 33% share. Other node clients have gained, with 33% being the threshold in ethereum’s Proof of Stake.

That’s a threshold similar to bitcoin’s 51%, though for eth it is worse as the network stops moving at all if more than 33% of the nodes go down, making client diversity important.

Some devs argued the merge shouldn’t happen unless that diversity issue was addressed. It now has been addressed.

Leaving little to resolve before the launch save for these upgrades of established testnets.

How the testnet upgrades will go however may well determine whether a timeline re-adjustment is needed, but at this stage Vitalik Buterin may well get fed up in autumn and say just get on with it.

The upgrade will remove Proof of Work miners and the $26 million a day they receive. Stakers instead will receive about 2,000 eth a day, $4 million, with that locked for another six months after the upgrade.

In the meantime the burning will take out supply from eth, making it deflationary. It will stay deflationary as long as more than 2,000 eth is burned. In the past 24 hours, 2,500 eth was burned.

Bears of course have FUD of their own because there’s about 2 million eth staking, which will be unlocked for the first time in about nine months.

That’s a huge amount and they can easily paint the picture of it flooding the market, but these are mostly holders, probably some miners, and once staking is less limited, staking defi may take off.

In addition, the removal of the still fairly high inflation rate of 4% is incomparable. Yet, it’s not clear how much the market cares right now or will care as ethereum has previously lowered its inflation rate during bear without much of an effect on price.

But this is a big change of monetary policy, and the biggest so far by two magnitudes, so at some point it will reflect on price.

Especially if improvements in second layers complement the upgrade in the months to come, with data sharding to follow which should make second layers more efficient.

After that, it isn’t clear whether ethereum is done as it certainly will be done on monetary policy once the upgrade goes through this autumn, and it may well be done on scalability as well which might move fully to L2s after data sharding.