Things to know:
– That’s it. The Merge is now live. It’s a long-awaited moment for the crypto industry.
– For Ledger Live* and Nano users, this software upgrade does not require any action on your side.
– While we have paused services generating ETH transactions to ensure your transactions don’t get caught during The Merge, you can now make ETH transactions as usual. All ETH services are back to normal.
– All ETH transactions are functional again for Ledger Enterprise users too.
– The Merge marks a full transition towards Proof of Stake for Ethereum, eliminating the need for energy-intensive mining and instead securing the network with staked ETH.
The long-awaited Merge, one of the most closely watched shifts in the crypto world, is now live. Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) is the most significant enhancement to the network to date.
As The Merge unfolds, key questions are arising. What is the impact on the Ethereum ecosystem? What does it mean for Ethereum miners? Does it affect Ledger users?
This article helps you find out.
Proof-of-work is out, proof-of-stake is in
Ethereum’s blockchain currently runs on a Proof-of-Work consensus mechanism, just like Bitcoin. But The Merge marks a full transition towards Proof-of-Stake, eliminating the need for energy-intensive mining and securing the network with staked ETH. Concretely, you don’t need a mining computer to participate in the network validation anymore. You only need to use your laptop and ‘stake’ a certain amount of crypto to validate transactions.
For Charles Guillemet, CTO at Ledger, “The Merge is one of the milestones on a long roadmap towards making Web3 use cases more easily accessible to hundreds of millions of users around the world.”
What are the implications of The Merge on ETH proof-of-work miners? As Charles Guillemet puts it: “With The Merge now live, miners are replaced by validators that don’t use GPUs to process transactions. For them, this means powering down their rigs, losing a source of income, and bearing the cost of the expensive and potentially useless mining equipment.”
By shifting Ethereum towards Proof-of-Stake, The Merge also raises new challenges. Fabrice Dautriat, Head of Developer Ecosystem at Ledger, believes that “consensus mechanism replacement is a leap into the unknown in terms of decentralization and game theory. Whether The Merge will bring more decentralization to Ethereum will be watched closely over upcoming months.”
You can now make ETH transactions again!
It’s important to understand that The Merge refers to the fusion of the current Mainnet we’re using today into the Beacon Chain, which is the new consensus layer. Because it’s a fusion, as a user, there’s absolutely nothing for you to do: the entire history and state of Ethereum remains intact. All your assets are safe.
With The Merge now live, block builders have changed. And that’s why we have decided to temporarily halt services generating ETH transactions on Ledger.
But don’t worry: everything is now back to normal. Now that all our systems are back to green (i.e. we’re seeing transactions go through again), we decided to open them up ETH transactions to users again.
Beware of scams! There is no such thing as ETH2 tokens
With the Merge now live, so are all kinds of scams. Airdrop schemes, fake tokens, mining pool frauds, you name it.
Here are a few things to keep in mind:
- There is no such thing as ETH2 tokens. There is only ETH (before and after the Merge)
- No official airdrops have been confirmed by the Ethereum Foundation.
- Watch out for Twitter accounts named ‘Ethereum support’ that require your personal information or remote access to your computer.
And never, ever share your recovery phrase with anyone.
Stay tuned for upcoming ETH updates
We are currently working hard on implementing the EIP-1559 upgrade to your Ledger Live app. The idea of EIP-1559 is to get rid of the first-price auction and replace it with a fixed-price sale, enabling you to have better estimates and more predictable transaction fees.
We are also currently looking into Ethereum Name Service (ENS) support. Not only on the Ledger Live interface, but most importantly on your hardware wallet screen. Remember, the trusted display of your hardware wallet is the only secure source of information when validating a transaction. This improvement requires heavy engineering, so stay tuned!
Regarding Ethereum staking, you can already stake your ETH through the LIDO Live App. But we are also looking at other options, either other types of Liquid staking or even native staking through a Ledger in-house solution.
At Ledger we are consistently listening to users’ feedback. And with all the different L2s out there, it was impossible for us to keep our eyes closed. Before the end of the year, we expect our users to be able to manage their Arbitrum and Optimism accounts, as well as many others.
The stage is set
We will continue to offer you the best-in-class support for Ethereum and Ethereum-based assets, backed by the security of your hardware wallets and the ease of use of your Ledger Live app.
*Disclaimer: Buy, swap, lend, and other crypto transaction services are provided by third-party partners. Ledger provides no advice or recommendations on the use of these third-party services.