After two years in development, ethereum has launch the first ever public testnet for the full upgrade to Proof of Stake known as the Merger.
The merger removes miners from having any role in the ethereum network, with validation to be carried out by stakers that deposit 32 eth.
There are already 2.3 million testnet eth deposited on the new network by 72,000 validators, showing significant interest as the ethereum community gets ready for one of its biggest upgrade.
The real Beacon chain eth network currently has 8.7 million eth staked, worth $33 billion, by 272,000 validators.
In a few months these eth and validators will be the ones running the ethereum network as they fully replace miners.
That will reduce ethereum’s environmental impact by 99.9% while at the same time lowering its inflationary rate from about 4% a year to between 0.2% and 1% a year.
Some call that the thirdening, in contrast to the halvening, as issuance will be reduced by 3/4 or 75%, making ethereum’s supply a lot more rare.
Otherwise there won’t be other noticeable changes. The move itself doesn’t provide any extra capacity, but it will facilitate data sharding which will make zk-tech and other second layer solutions considerably more efficient.
From an end user’s perspective the network will continue to operate the same, but from a governance perspective it remains to be seen whether stakers will be more willing to increase base capacity than miners.
For miners it is a simple equation of less capacity means higher fees and thus more money, so they have capped it both in bitcoin and eth for years.
For stakers the ‘pools’ are usually exchanges rather than specialized miner run entities. Those exchanges have an interest in increasing customer count so they may be more willing to increase the gas limit to satisfy user experience.
The merger thus indirectly should make ethereum more scalable at the base layer, but proper capacity is now expected more from smart contract based second layers in ethereum.
The upgrade is estimated by some to occur during summer, but with this public testnet now out, it should be spring when we get a decent idea of what block number will be set for the upgrade.
That’s presuming of course that everything goes fine, in which case ethereum will be deflationary in supply in just a few months presuming usage demand continues at current levels.