The Merge is here — a pivotal moment in blockchain history that marks Ethereum’s transition from energy-intensive Proof of Work (PoW) to the far more efficient Proof of Stake (PoS). Scheduled between September 10 and 20, this upgrade represents years of development and coordination across the global Ethereum community. While end users may not notice immediate changes, the long-term implications for scalability, sustainability, and tokenomics are profound.
In this guide, we’ll break down what The Merge is, how it will reshape Ethereum’s ecosystem, its impact on ETH supply and Layer 1/Layer 2 dynamics, and what it means for traders and stakers. We’ll also explore the future roadmap beyond The Merge.
What Is The Merge?
The Merge refers to the integration of Ethereum’s existing mainnet — historically secured by PoW mining — with the Beacon Chain, a parallel PoS blockchain launched in December 2020. This unification replaces mining with staking as the mechanism for validating transactions and securing the network.
Source: ethereum.org/en/upgrades/merge/
The process unfolds in two phases:
- Bellatrix Upgrade – Validator clients on the Beacon Chain prepare for the merge.
- Paris Upgrade – Execution Layer (mainnet) transitions to PoS once total difficulty reaches a predefined threshold.
Once complete, Ethereum will operate entirely under Proof of Stake, eliminating energy-heavy mining and laying the foundation for future scalability upgrades.
👉 Discover how leading platforms support Ethereum staking and trading post-Merge.
What Happens During The Merge?
Here’s a step-by-step breakdown of key events:
- The Beacon Chain has been live since December 1, 2020, finalizing consensus every 12 seconds.
- On September 6, the Bellatrix upgrade activates on the Beacon Chain (at epoch 144896).
- Between September 10 and 20, the Paris upgrade triggers when PoW difficulty hits 58,750,000,000,000,000,000,000.
- Approximately 13 minutes later (about two epochs), block production shifts from miners to validators.
- Ethereum mining ends permanently — GPUs must be repurposed or shut down.
You can monitor progress via real-time dashboards like Etherscan or Dune Analytics trackers showing cumulative difficulty.
Important Notes for Users
- No action required: Your wallet (e.g., MetaMask, Zerion) will function normally.
- Beware of scams: Messages asking you to “claim,” “transfer,” or “update” your ETH are fraudulent.
- User experience remains largely unchanged: Gas fees, transaction speed, and dApp functionality stay consistent post-Merge.
However, three key limitations persist immediately after The Merge:
- Gas fees won’t drop — block space capacity stays the same.
- Transaction finality improves slightly — now possible within ~12 seconds.
- Staked ETH remains locked until the Shanghai upgrade enables withdrawals.
Despite minimal short-term UX changes, The Merge fundamentally transforms Ethereum’s economic and environmental model.
The Merge’s Impact on ETH Supply and Tokenomics
This upgrade is arguably the most significant shift in cryptocurrency monetary policy to date. By switching to PoS, Ethereum slashes issuance and moves closer to deflationary status under high demand.
Key Changes in ETH Issuance
| Component | Pre-Merge | Post-Merge |
|---|---|---|
| Daily Block Rewards | ~13,000 ETH (miners) | ~1,600 ETH (validators) |
| Daily ETH Burned (EIP-1559) | ~1,000 ETH | ~1,000 ETH |
| Net Daily Issuance | ~12,000 ETH | ~600 ETH |
| Annual Emission Rate | ~4% | ~0.18% |
This represents an 87–95% reduction in new ETH issuance, drastically altering supply dynamics.
Why This Matters
- Reduced inflation pressure: With lower issuance, ETH becomes scarcer over time.
- Potential for deflation: During periods of high network usage (e.g., bull markets), daily burns could exceed issuance — making ETH net-negative in supply growth.
- Long-term value accrual: As Ethereum secures more value through DeFi, NFTs, and institutional adoption, reduced emissions enhance scarcity.
👉 Explore secure ways to manage and grow your ETH holdings today.
Layer 1 vs. Layer 2 After The Merge
Ethereum’s long-term vision positions Layer 1 as a secure settlement layer and Layer 2 as the engine of scalability.
Will Gas Fees Drop?
Not immediately. Block gas limits remain unchanged at 30 million per block, and throughput increases only marginally — from ~13 seconds average block time to exactly 12 seconds.
However:
- Finality improves: Transactions can be considered final after one block (~12 seconds), faster than PoW’s typical 60+ second confirmation window.
- Competitive L1s remain relevant: Chains like Avalanche and Fantom still offer near-instant finality and lower fees.
The Rise of Layer 2 Rollups
With sharding delayed, rollups (Optimism, Arbitrum, zkSync) remain critical for scaling:
- They bundle transactions off-chain and post proofs to Ethereum L1.
- Offer 10x–100x higher throughput at lower costs.
- Benefit from Ethereum’s security while improving UX.
Vitalik Buterin has emphasized that “once L1 is strong enough, the rest can be done by L2.” The Merge strengthens L1 — making rollups even more powerful.
How to Trade Around The Merge
While we don’t provide financial advice, here are legitimate strategies some investors consider:
If You’re Bullish on ETH:
- Buy ETH directly via decentralized exchanges (DEXs)
- Use perpetual futures with leverage (e.g., Perp, Kwenta)
- Gain leveraged exposure with tokens like ETH2x-FLI
- Explore innovative instruments like Opyn Squeeth, offering ETH² exposure without liquidation risk
If You’re Hedging or Bearish:
- Open short positions using perpetual contracts
- Benefit from positive funding rates during bullish sentiment
Volatility is expected around the event window. Always assess risk carefully.
How to Stake ETH After The Merge
Post-Merge, staking becomes more rewarding — validators earn both base rewards and transaction fees (including MEV).
Staking Options:
- Solo Staking: Run your own node with 32 ETH (requires technical expertise)
- Liquid Staking Protocols: Use Lido, Rocket Pool for flexible staking without lockups
- Tradeable Staked Tokens: Hold stETH, rETH, or sETH2 — earn yield while retaining liquidity
Although withdrawals won’t be available until the Shanghai upgrade, staking risks decrease significantly after The Merge due to protocol stability.
The Future Roadmap: Beyond The Merge
The Merge is just the beginning. Ethereum’s full vision includes:
- The Surge: Danksharding to boost throughput to 100k+ TPS via data availability layers
- The Verge: Statelessness using Verkle trees for lightweight nodes
- The Purge: Reduce historical data burden with state expiry
- The Splurge: Miscellaneous enhancements including ZK-proof integrations
According to Vitalik Buterin, Ethereum was ~40% complete before The Merge — now it's estimated at 55%. True scalability lies ahead.
Frequently Asked Questions (FAQ)
Will Ethereum’s price go up after The Merge?
No one can predict short-term price movements with certainty. However, reduced issuance (down 87–95%) improves long-term fundamentals. Market reaction depends on sentiment, macro conditions, and whether expectations are already priced in.
Does The Merge reduce gas fees?
No. Block size and network capacity remain unchanged. Fees are determined by supply and demand for block space — which won’t shift until Layer 2 adoption grows or sharding arrives.
What happens to MEV after The Merge?
MEV (Maximal Extractable Value) doesn’t disappear. Validators can still capture value from transaction ordering. Tools like Flashbots’ MEV-Boost allow validators to outsource block-building for higher rewards. Ethical and regulatory questions remain unresolved.
Is Ethereum 2.0 a new blockchain?
No. “Ethereum 2.0” is an outdated term. There is only one Ethereum blockchain. The Merge merges the PoS Beacon Chain with the existing mainnet — no new coin or fork is created.
Can I withdraw staked ETH after The Merge?
Not yet. Withdrawals will be enabled in a future upgrade called Shanghai, expected in early 2025.
Are there risks to The Merge failing?
The Beacon Chain has operated securely since 2020. Extensive testing on testnets (like Goerli) minimizes failure risk. A rollback would require extreme consensus failure — considered highly unlikely.
👉 Stay ahead of major crypto upgrades with real-time tools and insights.