Alexey Koloskov | September 15 2022
Alexey Koloskov | September 15 2022
The Ethereum blockchain has now completed its transformation from proof-of-work to proof-of-stake. In December 2020, Ethereum developers launched a new network called the Beacon Chain. This chain has become something else entirely, running parallel using PoS and achieving consensus via active validators. The Merge blends the original Ethereum Mainnet merging with a separate proof-of-stake chain, the Beacon Chain, now existing as one chain. Ethereum’s shift is a monumental move within the industry and for digital assets.
The Merge eliminates proof-of-work, an energy-intensive system that the industry already employs, in favor of proof-of-stake. In the crypto industry, staking means storing crypto in a protocol. Sometimes it’s simply a way to gain more interest in a company/project. In other cases, like proof-of-stake blockchains, stake-based currencies are helpful. The more Ether that is staked on the merged Ethereum chain, the more secure the blockchain will appear. Staked ETH, therefore, remains a sound foundation for the new blocks and new transition.
According to Ethereum, the Shanghai upgrade, which will follow The Merge as it didn’t include features to enable people to withdraw staked ETH, will allow stakers to withdraw their ETH as expected.
Timing of The Ethereum Network Merge
Instead of having a specific date, the Ethereum Network Merge centers upon the Terminal Total Difficulty number, which represents a number that shows the total difficulty of the block total minted under the network. The TTD number is 5875000000000000000.
The Ethereum blockchain and Orion
Orion Protocol being a liquidity aggregator means its consensus mechanism is the unique Delegated Proof of Broker mechanism. Smart contract-based transactions facilitate trading assets for users, giving them the ability to access not just one market but aggregated liquidity across CEXs, DEXs, and swap pools.
Being chain-agnostic, Orion uses a high level of technical complexity to combine several chains into one platform, making Orion a universal gateway to the crypto assets space for anyone in the world. The dev team has so far integrated Ethereum, BNB Chain, Fantom, and Polygon to Orion, with more chains to come, including Cardano, Avalanche, Holochain, Huobi Eco Chain, Elrond, Polkadot, and more.
How the shift to The Merge / Ethereum proof-of-stake affects Orion:
Orion’s extremely talented developer team, led by Orion’s CEO Alexey Koloskov, shares their thoughts and recommendations on this historic day and how it affects Orion. The developers discuss the new proof system as it switches from proof of work and the potential effect it may have with the transactions on Orion.
What are the pros and cons?
“We had prepared for this event in advance and were on high alert, as expected. However, we did not foresee any positive or negative consequences for it. The fees may go down temporarily or could become even higher following the event. We may see the speed increase, although this will have to be monitored in the coming time ahead. Judging by recent months, we would also prefer to reduce gas fees as much as possible for ETH - in line with our other fast and low-cost chains like BNB Chain, Fantom, and Polygon.
There is also the centralization dilemma, widely discussed by many words and sources across the community in relation to the block ownership. It relates to the fact that switching to PoS makes it easier to control the network without taking over actual physical mining assets. The main substantial positive is the huge reduction in its carbon footprint.”
“There is no particular effect for Orion or its traders/market. In the aftermath, there could be a point where we have a short trading suspension because of unforeseen circumstances such as micro forks. Either way, we have fully prepared the team for any conceivable scenario and high network activity. By default, Orion does not require any downtime or other upgrades. Any person wishing to use Orion can still do so effectively. There is no exterior block or limitation when using the Terminal.”
What about ETHPOW (the proof-of-work fork a small number of miners are supporting)?
“We will not be rolling out any specific support for ETHPOW as it seems like a passing phase which a lot of coins have had before, including the Ethereum Classic token, but have not really caught on. That said, if we ever needed to support the majority, we would, of course, support the default choice.”
What happens with ERC-20 tokens that are currently listed on the Terminal but may want to
follow ETHPOW and reject the transition?
“We will effectively have to stop supporting those tokens for the time being should they want to reject PoS ETH upgrade and search for a new solution.”
“Even with the close affiliation to Ethereum to improve transaction speed and more for Polygon, our team has conducted an internal discussion about this, and we do not expect The Merge to affect Orion or traders on the Polygon end.”
Orion’s ability to combine multiple chains and exchanges into one place means it is chain-agnostic and flexible to adaptations made on the chains themselves.
We’d like to thank the Orion development team for taking time out of their busy work schedule to answer some queries surrounding The Merge, the Ethereum validator process, potential software repercussions, and more.