The “The Merge”, or how the transition is known, is expected to take place sometime on September 15 and is being touted as one of the most important events for the crypto industry.
The switch is expected to reduce Ethereum’s energy consumption by almost 99.95%.
Ethereum refers to the blockchain-based software platform, while its cryptocurrency asset is called Ether.
The price of Ether, which had mostly trended higher over the last seven days (up 2.4% since September 7), fell by about 7% in the last 24 hours, according to data platform Coingecko.com, following the release of US inflation data on Tuesday.
Ether was trading at about $1,600 as of writing this article.
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The Merge was sent in motion on September 6 with the implementation of the Bellatrix Upgrade. According to the Ethereum Foundation’s blog, the upgrade activates in two phases: the first, named Bellatrix, and the second, named Paris.
Indian crypto trading platforms are seeing a surge in trading of Ether ahead of the Merge, senior industry executives told ET.
Trading activity on Ether “has been seeing increased traction with volumes up 70-80% (last seven-day volume, as compared to our average weekly volume on that pair) than our usual volume on Eth pairs,” said Minal
Thukral, executive vice president, growth and strategy at CoinDCX, a crypto exchange.
CoinSwitch Kuber has seen a 61% increase in traffic for Ether on its app from September 5-13, a spokesperson for Andressen Horowitz-backed crypto platform said. The number of Ether trades on the app had also gone up by 36% during this period, the spokesperson added.
Ethereum has the highest adoption among developers and Decentralised Finance (DeFi) projects and is the primary infrastructure layer of Web3, said CoinSwitch Kuber’s cofounder and CEO Ashish Singhal.
However, for greater adoption of the blockchain among enterprises, its energy consumption needs to be drastically reduced as businesses are striving for carbon neutrality, he said.
“Ethereum Merge is a pivot of unprecedented scale and complexity in the crypto ecosystem. Ethereum’s successful transition to a greener and energy-efficient blockchain will, in the long term, lead to the greater adoption of the technology,” Singhal added.
In the run-up to “The Merge,” all major platforms have been educating users about what to expect.
“We have been investing heavily in educating our users about the Merge, which is as significant as the BTC (Bitcoin) or ETH launch, in my opinion. There is a lot of buzz and inquisitiveness among users around this,” Thukral said.
What will happen to users’ Ether?
According to Thukral, the merge will have no impact on the users.
“The existing Ether will be upgraded automatically. If there is an additional new token, the old token will be replaced by a new token, and an additional token will be shown in the balances for the users,” he said.
Crypto exchanges are taking a cautionary approach and warning users in advance about the temporary pause on withdrawals and deposits for the crypto.
Bitbns said in a blog post that while trading has not been paused, deposits and withdrawals for Eth and ERC-20 would be suspended from September 6 to the time of successful completion of the merge.
ERC-20 is the standard for smart contract tokens created using Ethereum, according to Investopedia.
Similarly, crypto platform WazirX said it would disable deposits and withdrawals for Eth from 11:30 pm on Wednesday for the “Paris execution layer upgrade.”
“Users can continue trading as usual only the deposits and withdrawals of ETH and ERC-20 tokens might have a slight impact since the
exchanges will temporarily pause it during the event as a precaution for the safety of the user’s funds,” said Rajagopal Menon, vice president, WazirX.
“We are seeing a positive response from users since this is one of the major upgrades on the ETH network since genesis. The update is set to bring in further scalability upgrades bringing Ethereum one step closer to achieving the full scale, security and sustainability outlined in its Ethereum vision,” Menon added.
In a blog post, WazirX told users that a further announcement would be made regarding the timing for “the resumption of deposits and withdrawals, as well as further information about the potential Eth chain split that may affect the above information.”
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