The Ethereum network’s transition to proof-of-stake (PoS) — its new consensus mechanism for verifying cryptocurrency transactions — is known as The Merge. This pivotal upgrade marks the end of Ethereum’s reliance on the energy-intensive proof-of-work (PoW) model, originally popularized by Bitcoin, and ushers in a more sustainable, secure, and scalable future.
In this comprehensive guide, we’ll break down everything you need to know about The Merge, from its technical underpinnings to its real-world implications for users, investors, and developers.
Why Is It Called The Merge?
The term “The Merge” refers to the unification of two major components of the Ethereum network:
- The Execution Layer (formerly known as Eth1): This is Ethereum’s main blockchain where transactions occur and smart contracts are executed.
- The Consensus Layer (formerly known as the Beacon Chain or Eth2): Introduced in December 2020, this layer runs on proof-of-stake but initially didn’t process any user transactions.
For over two years, the Beacon Chain operated parallel to the main Ethereum chain, allowing validators to stake ETH and practice PoS consensus without affecting live network activity. The Merge is the moment these two systems merge into one, enabling Ethereum to fully operate under proof-of-stake.
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Proof-of-Stake vs. Proof-of-Work: What’s the Difference?
Understanding The Merge requires grasping the shift from proof-of-work (PoW) to proof-of-stake (PoS) — two fundamentally different ways of securing a blockchain.
Proof-of-Work (PoW)
- Used by Bitcoin and pre-Merge Ethereum.
- Miners use powerful computers to solve complex mathematical puzzles.
- The first miner to solve the puzzle gets to add a new block and earn rewards (new ETH + transaction fees).
- Extremely energy-intensive due to computational competition.
Proof-of-Stake (PoS)
- Post-Merge Ethereum uses this model.
- Validators are chosen randomly to propose and attest to blocks based on how much ETH they’ve staked (minimum 32 ETH).
- No mining required — instead, validators “stake” their ETH as collateral.
- More energy-efficient (up to 99.95% reduction in energy use).
- Offers built-in penalties (slashing) for malicious behavior, enhancing security.
Both systems reward participants with ETH for maintaining network integrity, but PoS aligns incentives more directly with long-term network health.
As a User or Holder, Do I Need to Prepare?
No action is required if you’re simply holding or using ETH.
Whether you store your Ethereum in a wallet like MetaMask, trust wallet, or on an exchange, your funds remain safe and fully functional after The Merge. There's no need to:
- Upgrade your wallet
- Swap or claim new tokens
- Move your funds
Ethereum’s transaction history remains intact, and your balance will be unchanged. The Merge is a backend upgrade — like switching engines on a moving airplane — invisible to everyday users.
However, node operators and developers must update their software clients (e.g., Geth, Lighthouse) to ensure compatibility with the new consensus rules.
Will Ethereum Transaction Fees Decrease After The Merge?
Unfortunately, The Merge itself will not reduce gas fees.
High transaction costs on Ethereum are due to network congestion, not the consensus mechanism. Since block size and demand remain largely unchanged post-Merge, fee pressures persist.
That said, future upgrades will tackle scalability:
- Proto-danksharding and danksharding: Aim to drastically lower rollup costs and increase throughput.
- Layer 2 solutions: Networks like Arbitrum, Optimism, and zkSync already offer cheaper, faster transactions by processing them off-chain and settling final results on Ethereum.
These innovations — combined with PoS — form part of Ethereum’s long-term roadmap toward mass adoption.
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Will Transaction Speeds Improve?
Yes — but only slightly.
Under PoW, Ethereum produced a block roughly every 13–14 seconds. After The Merge, blocks arrive at a steady interval of exactly 12 seconds.
While this improves predictability, it doesn’t significantly boost transaction speed for most users. Ethereum still lags behind high-performance chains like Solana (~400ms block times) and Avalanche (~2 seconds), though it outperforms Bitcoin (10-minute average).
Real speed improvements will come later via sharding and Layer 2 rollups.
What Happens to “Eth2”? Is It Still a Thing?
No. The term “Eth2” is officially retired.
Before The Merge, many referred to the Beacon Chain as “Eth2,” implying a separate upgraded version of Ethereum. Now that both chains have merged, there’s only one Ethereum.
To avoid confusion, the community now uses clearer terminology:
- Execution Layer: Handles transactions and smart contracts (old Eth1).
- Consensus Layer: Manages validator coordination and PoS rules (old Eth2).
This change is purely semantic — Ethereum’s development goals remain unchanged.
When Did The Merge Happen?
The Merge occurred when Ethereum’s total terminal difficulty (TTD) reached 58,750,000,000,000,000,000,000, triggering an automatic switch from PoW to PoS.
This milestone was reached on September 15, 2025, marking one of the most significant events in blockchain history. Unlike traditional software updates with fixed release times, The Merge was designed to activate based on network conditions rather than calendar dates.
Can I Withdraw Staked ETH After The Merge?
Not immediately.
While The Merge enabled PoS consensus, withdrawals of staked ETH were not unlocked until roughly 6–12 months later, through a follow-up upgrade called Shanghai/Capella.
Once activated:
- Validators could exit the network
- Staked ETH and accrued rewards became withdrawable
- Flexible staking options emerged (partial withdrawals, restaking)
This phased rollout ensured network stability during the critical transition period.
Will the Price of ETH Go Up After The Merge?
There’s no definitive answer — crypto markets are influenced by many factors beyond protocol upgrades.
That said, The Merge introduced deflationary pressure on ETH supply:
- Reduced issuance rate under PoS
- Continued ETH burning via EIP-1559
- Increased demand from staking participation
Historically, anticipation around The Merge fueled bullish sentiment. However, long-term price performance depends on adoption, regulatory developments, macroeconomic trends, and future upgrades like sharding.
Frequently Asked Questions (FAQ)
Q: Do I need to do anything with my ETH before or after The Merge?
A: No. If you’re a regular user or holder, no action is needed. Your funds are safe and will work exactly as before.
Q: Will I get free tokens after The Merge?
A: No legitimate airdrop occurs due to The Merge. Be cautious of scams claiming otherwise.
Q: Can I start staking ETH now?
A: Yes — though solo staking requires 32 ETH. Alternatives include liquid staking services like Lido or using staking pools via platforms.
Q: Is proof-of-stake less secure than proof-of-work?
A: No. PoS is designed to be equally or more secure, with economic penalties deterring attacks and lower centralization risks over time.
Q: Does The Merge make Ethereum fully scalable?
A: Not yet. Scalability will be achieved through upcoming upgrades like sharding and Layer 2 expansion.
Q: How much energy does Ethereum save after The Merge?
A: Over 99.9% reduction in energy consumption — making Ethereum far more environmentally sustainable.
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The Merge wasn’t just an upgrade — it was a transformation. By moving to proof-of-stake, Ethereum became more energy-efficient, secure, and poised for future innovation. While immediate changes for users may seem subtle, the long-term impact sets the stage for broader adoption, lower costs, and a greener blockchain ecosystem.