The Ethereum Merge 101: What Is It, and How Does It Affect VeeFriends Holders?

It’s very likely that by now you’ve heard talk of “The Merge”, one of the largest technical events in crypto history. Let’s take a look at what it is, and what impact it will have on VeeFriends holders.

Things VeeFriends Need to Know

When:?September 10–20, 2022

What do I need to do??Absolutely nothing!

Will there be scams??Almost certainly! Be extra wary in the days surrounding the Merge, and remember you do not need to take any action to prepare for the Merge. Anyone telling you otherwise is likely a scammer.

What is The Merge?

The existing execution layer of Ethereum (the Mainnet we use today) is merging with the Beacon Chain.

Our existing Ethereum blockchain contains every transaction, smart contract, and balance since it began in July 2015. The Ethereum blockchain is secured using?Proof-of-Work?(PoW) and funded through user transaction fees.

The Beacon Chain launched in December 2020, and contains no transactions. It serves only as a?Proof-of-Stake?(PoS) blockchain. In the proof-of-stake model, users still pay transaction fees, with the fees going to the stakers and not the miners.

When the existing Ethereum blockchain and the Beacon Chain are merged the responsibility for processing the validity of all transactions and proposing blocks will change from Proof-of-Work to Proof-of-Stake.

This is a well tested, well known, highly anticipated upgrade to the Ethereum network. It has taken a long time to get here and there have been delays to make sure the quality is topnotch.

What is Proof-of-Work (PoW) and Proof-of-Stake (PoS)? What’s the Difference?

Proof-of-Stake (PoS):

A consensus mechanism for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency.

Proof-of-Work (PoW):

A form of cryptographic proof in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended.

The difference is that to validate transactions on the blockchain,?PoS?uses validators staking ETH, and?PoW?uses validators performing computational work.

What Are the Benefits of The Merge?

The Merge will not require the same energy-intensive hardware as PoW, making Ethereum?far more energy efficient?and greatly improving the environmental impact of the blockchain.

The Merge will also improve Ethereum’s security against coordinated attacks. Transitioning to proof-of-stake provides greater disincentives against attack, because the validators securing the network must stake ETH into the protocol. An attack would risk the loss of ETH.

Moving to proof-of-stake also prepares Ethereum for scalability upgrades that would not be possible under proof-of-work.

When Will The Merge Take Place?

There’s no concrete date set yet — according to?ethereum.org, the devs are working to a soft deadline of 09/19/22 with Ethereum founder?Vitalek Buterin?reporting calculations predicting the merge happening around 09/15/22. The latest word from the?Ethereum Foundation blog?reports the Merge will take place between Sept 10–20, 2022.

Do I Need To Take Any Action?

No.?The entire transactional history of Ethereum will be merged automatically during this process. No changes to your funds or wallet are required.?Users or holders of ETH or any digital asset on Ethereum do not need to take any action.?To be extra safe, you may want to refrain from taking any actions for the few days before and after the merge.

Like many of the popular?NFT?projects that have publicly committed to supporting only the merged proof-of-stake chain, we are also going forward with proof-of-stake only. Once again, there is no action needed on your part.

Will The Merge Reduce Gas Fees?

No, this is the biggest misconception — gas fees are not affected by The Merge. This will not materially reduce fees on the network or increase scalability. The Merge however will not require the same energy-intensive hardware as PoW, making Ethereum?far more energy efficient?and greatly improving the environmental impact of the blockchain.

Be on High Alert for Scams!

Scammers will certainly be attempting to use this event as a method to scam users. Do not send your ETH anywhere that offers to upgrade it to ‘ETH2.’ There is no ‘ETH2’ token, and no action is required from you during the Merge.

Tell Me More!

There are plenty of good in-depth sources providing more information on the Merge. A few are listed below for you to check out if you’d like to know more.

Official Ethereum website:?Ethereum.org: The Merge

Popular Web3 newsletter:?Bankless: Everything You Need to Know About the Merge

Website on the Merge recommended by Ethereum.org:?ETHMerge.com: The Ethereum Proof-of-Stake Merge