Thread by @banklessDAO

The #Ethereum #Merge is coming around Sept 14th. It isn't easy to predict the exact date bc/ it is defined on terminal total difficulty but it will happen around this date.

🧵But what is the merge and why is it so important? This thread should help to explain it.
#EthereumMerge

What is the #Merge?
It is a long-awaited change from #ProofOfWork to #ProofOfStake or to be more precise the merging of the #PoW Execution Layer with the #PoS Execution Layer.

This will bring the #Ethereum Chain into a new era by removing miners and using validators instead.

Imagine a castle wall: #PoW is a wall made of electricity & if someone wants to break through, they need at least 51% of the total energy in place. #PoS is a wall made of money & if someone wants to break it, they need at least half the money piled up (50% atm: 6.7 Mio #ETH)

There are 3 major effects resulting from the Merge:

1. Reduced Sell Pressure (from miners)

2. Environmentally Friendly (less energy consumption)

3. Eventually Deflationary: Less issuance of #ETH can lead to #UltrasoundMoney

If you want to keep track of the number around the #Merge, there are plenty of awesome @DuneAnalytics dashboards that will keep you up to date. One of our favorites is this one from @hildobby_: dune.com/hildobby/ETH2-…

@DuneAnalytics @hildobby_ #ETH will become ultrasound if the fee burn rate (thx to #EIP1559) is greater than the #PoS issuance. This only works if the network demand & therefore gas prices are around 30GWEI. @ultrasoundmoney has one of the best websites about this, check it out: ultrasound.money

@DuneAnalytics @hildobby_ @ultrasoundmoney Once the #merge is completed there is no need for expensive hardware & lots of energy to protect the #ETH Chain. With 32ETH you can become a validator or with less you can participate in liquid staking w/ @LidoFinance, @Rocket_Pool, etc. → You get rewarded with Network fees

@DuneAnalytics @hildobby_ @ultrasoundmoney @LidoFinance @Rocket_Pool No, gas prices won't go down right after the #merge. We have #Layer2 for this. #Ethereum will remain the most secure place for your transactions. For everyday usage, the various L2 will be the place to be

@DuneAnalytics @hildobby_ @ultrasoundmoney @LidoFinance @Rocket_Pool It also won't be possible to withdraw your staked #ETH right after the #merge. You have to wait until the #shanghaiupgrade in 2023. @apolynya calls this a derisking event because investors will gain confidence after a successful unlocking period.

@DuneAnalytics @hildobby_ @ultrasoundmoney @LidoFinance @Rocket_Pool @apolynya The journey of #Ethereum is also not over after the #merge and there are plenty of steps to be taken:

The #Surge (Scalability), The #Verge (Statelessness), The #Purge (protocol simplification), The #Splurge ("fun stuff")

We see each other on the other side of the merge.