The latest situation of Ethereum Upgrade

2022-08-29, 03:40

[TL;DR]

The commencement of the Ethereum upgrade began with the creation of the Beacon chain in December 2020.

The upgrade, which is planned in three phases, has reached the high point where all public testnets have been transitioned into proof-of-stake.

The Merge of the Mainnet with the Beacon chain is now tentatively fixed for September 19.

In preparation for the Merge, the Sepiola testnet has received its first poet-merge update, while an upgrade for the Bellatrix and the Merge transition has just been recently announced.

Introduction

ethereum.org

The Ethereum upgrade, which began with the activation of the Beacon chain in December 2020, is approaching a climax where the Beacon chain will merge with the Ethereum mainnet. The developers have tested the Merge on three public testnets, Ropsten, Sepolia and Goerli testnet. Among the testnets, Sepolia is now the first to get a post-merge upgrade, while others will soon follow suit. All eyes are on the Merge billed to take place with the Paris upgrade by September 15.

What is Ethereum Upgrade?

The Ethereum upgrade is a paradigm shift of the Ethereum network planned in three phases. The first phase was completed two years ago with the creation of the Beacon chain known as phase zero. While the Ethereum mainnet continues to use the proof-of-work mechanism, the Beacon chain was created using a proof-of-stake. Currently, the two are operating on parallel networks. The second phase of the upgrades involves merging layer 1 Ethereum Blockchain as the "transaction layer" with layer 2 Beacon chain as the "consensus layer." This second phase, known as Merge, is edging towards completion, creating a buzz in the Ethereum ecosystem. September 15 has been announced as the tentative completion date with a probable one-week error.

The Merge is expected to lay the foundation for shard chains and increase transactions from 15 TPS to nearly 3000 TPS.

Latest Situation of the Upgrades

The Merge differs from earlier Ethereum updates in two ways. Firstly, the consensus layer (CL) and execution layer (EL) clients of network operators must first be updated simultaneously, rather than only one of the two. Also, the upgrade is activated in two stages: Bellatrix at an epoch height on the Beacon Chain and Paris when the execution layer reaches a Total Difficulty value.

As validators start carefully watching the Proof-of-Work chain to start the Merge transition, Bellatrix upgrades the Beacon Chain to be "Merge aware," integrating the Merge logic in the Beacon Chain. Bellatrix is turned on at the selected period.

Paris is the Merge transfer, in which the Ethereum Mainnet switches its Proof-of-Work consensus for the Beacon Chain's Proof-of-Stake consensus. The Paris upgrade is likely to take place on September 15th.

Some of the updates on the Merge include:

1.Release of the upgrade for the Bellatrix and the Merge Transition

Teku, an Ethereum 2.0 client, announced the release of v22.8.1 on August 22 in a tweet. This update is required to set the Bellatrix upgrade on September 6 and prime the network for the Merge on September 19.

Teku tweet

All Mainnet nodes must be upgraded to the required Teku version to transition to proof-of-stake (PoS). It entails validators connecting to a local execution client's engine API and specifying a default fee recipient.

Mainnet nodes must upgrade Teku and the execution client to prepare for the Merge. Teku will report a "Merge transition configuration error if execution clients are not upgraded." The transition on the Mainnet node will be invalidated if the local terminal total difficulty (TTD) and terminal block hash values do not match those of the remote execution client.

2. Sepiola post-merge upgrade

One of the three Ethereum public testnets, Sepolia, received the first post-merge update on August 22. This update is first-of-its-kind on any of the Ethereum proof-of-stake testnets. The update was scheduled for August 17 but was delayed for four days to allow some offline validators to reconnect to the network.

While the upgrade's effects are not "user-facing," all upgrades to Ethereum testnets – even small ones – are significant steps in ensuring that the new proof-of-stake protocol runs smoothly. The new update will cause execution layer clients to disconnect from any node that did not change to proof-of-stake, which helps maintain a healthy network for Ethereum. Nevertheless, the Ethereum Foundation noted that the upgrade would not result in any additional functionality to the chain.

3. Post-merge upgrade of Testnets and Exceptions

In preparation for the Ethereum Merge, which is expected to take place in mid-September, some test networks (testnets) have gone through the merge process and switched from proof-of-work to proof-of-stake. One of the earliest is the Rospten network, followed by Sepiola, which successfully merged on July 6, and Goerli, which merged last week.

The Ropsten testnet, considered deprecated, did not receive an upgrade. All Core Developers called Ethereum developers on August 18 and discussed deprecating the Kiln testnet ahead of the Merge. The reason is that the network is not seeing many transactions, and participants have moved most of their testing to the Goerli tesnet. Even after the Merge on Ethereum's mainnet, Goerli, which switched to proof-of-stake last week, will continue to see network upgrades.

What to look out for

Users must remain vigilant between the initial mainnet release announcements and the final Merge transition, monitoring client channels, the EF blog, and other public resources for any new information. Client teams, in particular, may release final hardened versions of their software during this time frame, and users should upgrade if possible.

Some of the things to look out for are:

The Merge and Shanghai upgrade
The Merge upgrade does not include certain anticipated features, such as the ability to withdraw staked ETH to simplify and maximize focus on a successful transition to proof-of-stake. The Shanghai upgrade will come after The Merge, allowing stakeholders to withdraw. Shanghai's activation will put EIP-4895 into effect. Ethereum (ETH) stakers will be able to partially withdraw rewards while keeping 32 ETH deposits untouched.

Merge and Sharding
The original plan was to work on sharding before the Merge to address scalability. However, with the rise of layer two scaling solutions, the emphasis has shifted to The Merge, which converts proof-of-work to proof-of-stake.

Plans for sharding are rapidly evolving, but sharding plans have shifted, given the rise and success of layer two technologies for scaling transaction execution. The focus now is on determining the best way to distribute the burden of storing compressed call data from rollup contracts, allowing for exponential growth in network capacity. This would be impossible without first implementing proof-of-stake.
We will keep you posted on gate.io on new developments as events unfold.

The Merge and ETHPoW Fork

Ethereum mining hardware value currently stands at $4 billion which will no longer find use on the Ethereum mainnet after the Merge. Some miners led by Chandler Guo have proposed an Ethereum fork that will maintain a proof-of-work on a parallel chain. They have tentatively scheduled the launch for September 8th. The Ethereum Classic (ETC) Cooperative in an open letter to Chandler Guo, discussed why the new imminent fork, ETHPoW will fail and why miners should switch to Ethereum Classic. The ETHPoW also responded that Ethereum Classic would not be able to handle all current Ethereum miners. Hence, several PoW forks are required.

Ethereum's suite of decentralized finance applications makes mining on it very lucrative even more than Bitcoin. This fact drives miners to invest so much in hardware even though proof-of-stake has always been the end game of the network according to the roadmap.

Observers have noted that neither of the two options of mining other GPU-compatible coins like Ethereum Classic nor the proposed ETHPoW will furnish the miners with the cash flows that they have generated on Ethereum. It is, however, a development worth watching out for as some projects have supported the proposed fork planned for a week before the Merge and some have opposed it.

Conclusion

Despite the several delays of the Merge, the coast seems clear now as upgrades follow in quick succession. The release of the tentative date for the final Merge is a pointer to the fact that there is no going back on the upgrades. Of course, issues will come up, and bugs will happen. Ethereum developers are taking their time to ensure a smooth transition through the additional testing and upgrades.

Author: Gate.io Observer: M. Olatunji
* This article represents only the views of the observers and does not constitute any investment suggestions.
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