The upcoming merge upgrade of Ethereum is a highly anticipated event awaited by the worldwide blockchain community. Ahead of the release, a report by DappRadar states that stablecoins and transactions backed on the Ethereum blockchain may face some blockages. Ethereum is moving from its energy-intensive Proof-of-Work (PoW) mining model to an energy-efficient Proof-of-Stake (PoS) mining model. This update to the blockchain, called Merge, is expected to be released in mid-September and is widely regarded as the biggest update to the blockchain to date.
Ethereum supports an ecosystem of decentralized token trading, lending and yield-farming projects that process billions of dollars in crypto value daily. As the Ethereum blockchain moves towards merge upgrades, the transition could lead to a disruption in the decentralized finance (DeFi) protocol.
The Ethereum blockchain has the largest amount of total value locked in decentralized exchanges and lending protocols, CoinDCX,
in his report good, DappRadar noted that in a recent Twitter thread MakerDAO (MKR) claimed that the merge could do more harm than good. Maker DAI is the creator of the stablecoin DAI. As part of its analysis, the maker also predicted that a merge release could trigger selling pressure in the blockchains that exist on PoW.
Lately, the focus has been on imaginable post-merger PoW Ethereum forks.
What potential risks does the manufacturer face if they are thorns?
:thread:
1/
— Maker (@MakerDAO) 5 August 2022
Crypto investment firm Grayscale also recently expressed concerns about the effects of the merger on the market. The report states that the crypto investment firm believes that the merger could lead to a fork that could have unpredictable and adverse consequences.
2. First, it is important to note that motivations differ. The 2016 Ethereum fork was driven by a crisis, while the upcoming Proof of Stake (PoS) migration is driven by an ambitious, proactive technical update.
Let’s look a little deeper.
— grayscale (@greyscale) 16 August 2022
While all of these predictions will be tested in due course, the merge marks one of the most defining milestones in the blockchain industry.
Earlier this month, stablecoin major Tether and Circle Pay, a USD coin issuer, extended support for the merge.
While Tether has decided to begin making arrangements to support the merge according to its release schedule, Circle Pay has stated that once the merge is released, it will only use that version of Ethereum for USD Coin operations. .
The merge upgrade is expected to reduce Ethereum’s power consumption by 99.95 percent, its developers claimed in a blog post Last year.
Meanwhile, bug bounty payments for Ethereum can now go up to $1 million (about Rs 8 crore), the developers of the blockchain have said in a recent update.
