What Will Happen to My Ethereum After The Merge?
Ethereum 2.0 is coming. Here’s what to expect if you’re holding Ethereum (ETH).
The impending Merge is set to tentatively replace Ethereum’s Mainnet with the Beacon Chain and a number of sharded chains in September 2022. This move marks the end of Ethereum’s proof-of-work (PoW) model as it completes the final transition to a proof-of-stake (PoS) model.
To explain this in simpler terms: imagine Ethereum is a racing car while Beacon Chain is a new, more fuel-efficient engine that will replace the old engine mid-race. Everything else about the car will remain the same, with one significant change — how the car runs.
Disclaimer: The information in this article is subject to change as more details on The Merge become available.
I’m HODLing Ethereum — How Do I Prepare for the Merge?
The short answer is that Binance users won’t need to do anything — The Merge will not affect the funds of Ethereum holders. All Ethereum funds will transfer over after The Merge, and Ethereum will still appear as ETH in users’ wallets. However, Binance will temporarily pause Ethereum deposits and withdrawals until The Merge is complete.
Binance users should be wary of scammers asking them to purchase “ETH2” tokens or transfer funds to a random wallet address to “complete the upgrade.” Binance will never ask users to send funds in this manner.
How Will The Merge Affect Binance Products?
The majority of Binance services will be largely unaffected by The Merge besides a delisting of ETH from our mining service as well as a temporary pause on ETH borrowing, deposits, and withdrawals. Additionally, users who locked their ETH on Binance’s Ethereum 2.0 staking service can swap their BETH tokens back to ETH if they wish after The Merge.
In a later announcement, we’ll provide more details on how The Merge will affect each Binance product.
In the Event of a Fork
Please note that if Ethereum splits into two different networks — a process known as a fork — the “ETH” ticker will refer to the new Ethereum PoS chain. The forked token, on the other hand, will still undergo the strict listing process required for every token listing on the Binance exchange.
Understand that a fork may or may not happen. According to Ethereum’s team, any hard fork during The Merge will be unofficial. If the “unofficial” fork happens, Binance will release further details about token distribution in a future announcement.
Speed, Gas Fees, and Staking
1. Transaction speeds
Ethereum holders can expect similar transaction speeds after the upgrade. The slight changes will be unnoticeable to the average user.
2. Gas fees
Ethereum gas fees will remain the same for now. In theory, the Ethereum upgrade sets the stage for sharding, opening up possibilities for cheaper gas fees in the future.
Instead of miners, people who stake Ethereum will help secure the network. Do note that stakers won’t be able to withdraw their staked ETH for six to 12 months after The Merge.
Once Ethereum implements the Shanghai Upgrade, however, the network will allow a total of up to 40,000 staked ETH in daily withdrawals.
Get Ready for The Merge With Binance
The Merge is a significant milestone for the Ethereum network and the larger Web3 ecosystem. At Binance, we aim to ensure a seamless transition for Binance users holding ETH. We’ll continue to update our blog and the official Binance Twitter as more details become available.