Ethereum: passed the penultimate Merge test

The Merge of Ethereum’s Sepolia testnet has been successfully completed. 

Sepolia summary:
– Merge transition itself was a success
– 25-30% of the validators went offline shortly after the merge
– The offline validators were due to wrong configs
– Since then, the offline parties have updated their configs, and validators are up

(cont)

— terence.eth (@terencechain) July 6, 2022

Ethereum’s Merge is getting ever closer

Although about 30% of validators went offline at the time of the Merge, they later came back online after updating their software. No client bugs have surfaced. 

Sepolia is Ethereum’s new main testnet, as it was designed specifically for the new PoS-based Beacon Chain. The success of this test, far from a foregone conclusion, paves the way for the final Merge on the mainnet. 

Previously, the Merge on the previous mainnet testnet, Ropsten, had also been successful, so there is now only one more to go on the Goerli testnet. 

The date for this last test has not yet been decided, but it is possible that it will take place in August. At that point, if successful, it is possible to imagine the actual Merge happening in September, or October. 

The Merge on the mainnet will effectively replace Ethereum’s current Proof-of-Work (PoW)-based blockchain with the new Proof-of-Stake (PoS)-based Beacon Chain. 

This is a momentous transition that must be executed with the utmost care, attention and caution. That is why all possible tests are carried out first so as to make sure that everything goes as planned. 

Therefore, by the end of this year Ethereum may have finally abandoned PoW, the consensus algorithm also used by Bitcoin, and switched to the more streamlined PoS, which should also allow for lower fees. 

ETH’s market response after the good news

It is worth noting that the news of the near-immediate success of the Merge on Sepolia helped ETH’s price rise again yesterday to nearly $1,200. During the night, however, it fell slightly to below $1,170. 

In truth, yesterday pretty much all cryptocurrencies were up slightly, with BTC, BNB, XRP, and ADA at +2%. ETH, on the other hand, was up +4%, followed among the top 10 by SOL with +3%. 

The curious thing is that much of the news in recent weeks about the approach of the final Merge had not had a particularly beneficial effect on the price of ETH, so it is possible that the previous phase of high difficulty in the crypto markets is over. However, it is not necessarily the case that the new phase will be positive. 

Right now the price of ETH is still 76% below its November highs, however, it has recovered 11% in the past two weeks. Yet, it remains 37% lower than it was a month ago.