Although the developers of Ethereum assured users that there would be no downtime during The Merge, one of the most eagerly awaited Ethereum updates, the cryptocurrency community decided to take preventative action to guarantee the security of investor funds.
In support of this, the cryptocurrency exchange FTX said that it would freeze all Ether (ETH) transactions on secondary blockchains until the September update is complete.
Sam Bankman-Fried, CEO of FTX, confirmed that “ETH trading will stay on through Merge” shortly after the announcement. FTX later deleted the post.
In order to save energy and enable sharding, the Merge upgrade will permanently switch the Ethereum blockchain’s consensus process from proof-of-work (PoW) to proof-of-stake (PoS).
The terminal total difficulty (TTD), which ensures the transition based on the total mining power that goes into generating a chain, is how Ethereum developers claim the Merge is planned to switch to PoS with zero downtime. FTX decided to halt “deposits and withdrawals until the Merge is finalised and networks are stable” despite the explanation.
The suspension of Ethereum deposits and withdrawals across different blockchains has been scheduled to start at various points but is still subject to change based on potential issues.
Trading will remain open for ETH through the Merge. In terms of deposits and withdrawals of wrappers and layer 2, we will suspend:
- Arbitrum One ETH on September 7, 2022 at 00:00 UTC.
- Solana (Wormhole) ETH on September 15, 2022 at 00:00 UTC.
- Binance Smart Chain (BSC) ETH on September 15, 2022 at 00:00 UTC.
— From FTX’s official blog post
FTX reminded the users that the crypto exchange will not be liable for any losses caused by significant price swings, adding that it is their obligation to understand the ramifications of this message.
Ethereum Foundation made it clear that the upcoming upgrade will not be lowering gas fees. It explained that the relationship between network demand and network capacity determines gas prices. While switching from proof-of-work to proof-of-stake for consensus, The Merge does not dramatically alter any parameters that directly affect network throughput or capacity.
