Although Ethereum developers promised that there would be no downtime for The Merge, the most anticipated Ethereum upgrade, members of crypto community took proactive steps to protect investor funds. Crypto exchange FTX announced that it would suspend all Ether (ETH), trades on different blockchains, until the September upgrade is complete.
Merge upgrades will permanently change the Ethereum blockchain’s proof-of work (PoW), to a proof–of-stake consensus mechanism (PoS). This is a way to reduce energy consumption and introduce sharding capabilities.
The Merge, according to Ethereum developers is designed to transition PoS to PoS without any downtime owing the terminal total difficulty (TTD) which will ensure that the transition is based on the total amount of mining power used to build a chain. FTX decided to suspend withdrawals and deposits until the Merge is complete and networks are stable, despite the explanation.
To ensure that settlement is clear, FTX will temporarily block blockchain transfers of secondary chains to ETH. However, main chain ETH transfers will remain active longer. Details: https://t.co/iVUjo4ZqyO
— FTX (@FTX_Official) September 5, 2022
Trade suspension for Ethereum on different blockchains has been set to begin at various times, but is subject to change due to anticipated complications.
Official timelines of FTX for halting ETH trading. Source: FTX
FTX stated that crypto exchanges are not liable for losses if large price fluctuations occur, and that it is the user’s responsibility to fully understand the implications.
Related: The Merge – Top 5 Myths About the upcoming Ethereum Upgrade
The Ethereum Foundation has clarified one of the most common misconceptions about The Merge. They stated that the upcoming upgrade would not lower gas fees. According to the official statement:
Gas fees are a function of the network’s demand relative to its capacity. Merge disallows proof-of work and transitions to proof-of stake for consensus. However, it does not significantly alter any parameters that directly affect network capacity or throughput.
The upgrade will not reduce the need to mine energy-intensive minerals.