The Merge won’t reduce gas fees, clarifies Ethereum Foundation

The Merge won't reduce gas fees, clarifies Ethereum Foundation

In an update note released on Wednesday, the Ethereum Foundation has clarified that the network’s long overdue transitory upgrade, called the “Merge,” won’t reduce gas fees significantly. 

“Gas fees are a product of network demand relative to the capacity of the network. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput,”

wrote the Ethereum Foundation. 

The Merge, which essentially entails the amalgamation of the existing Ethereum layer with the new proof-of-stake layer, the Beacon Chain, will instead focus on reducing energy usage and scaling activity built over layer-2 solutions with a more secure decentralized layer. 

There was a belief among some in the community that the Merge would greatly reduce transaction fees.

Ethereum Founder Vitalik Buterin had previously said that gas fees could be as low as $0.002 with roll-ups post the Merge, which led to some confusion. The Ethereum Foundation’s clarification would evidently help in settling the debate. 

On transactions, the organization said that “speed can be measured in a few ways, including time to be included in a block and time to finalization. Both of these changes slightly, but not in a way that users will notice.”

Some other clarifications on misconceptions related to the Merge were:

  • Running a node won’t ever require staking ETH. Anyone could do it with a self-verified copy of Ethereum.
  • Staking rewards will only be activated post the Shanghai upgrade. The Merge won’t enable any rewards for validators. 
  • The APR rate is estimated to grow by 50%, not 200%.
  • Downtime doesn’t just reduce but becomes zero. “Ethereum does not have downtime.”

The Foundation is currently working on a tentative deadline of Sept 19 to complete the transition. 

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Himan Mohapatra
Himan Mohapatra
Himan Mohapatra is an industry expert within the crypto-sphere and the primary journalist for Coinmash. He is an expert in finance and disruptive tech, such as blockchain.