Ethereum has activated The Merge and transactions are now being processed under proof of stake.
The next step is to watch for attestations and wait until the first proof-of-stake slot gets finalized. This will happen over the next 12 minutes.
The Merge upgrade was activated at the agreed upon Total Terminal Difficulty (TTD) on Ethereum’s proof-of-work chain at 6:44 AM UTC today. TTD is a combined measure of how difficult it is to produce a block for transactions and how this has fared over time.
The Merge has been in development since 2020 and is the second and final step in the transition to proof of stake.
It represents the official switch to using the proof-of-stake Beacon Chain for block production. The Merge also represents the shift from mining — using computing power to produce blocks for rewards — to validating, where it is no longer a competitive environment for validating transactions.
The Beacon Chain’s launch in 2020 was the first step of The Merge. Ethereum developers wanted to break The Merge into two steps, giving optimal time to test the upgrade prior to fully switching to proof of stake.
An analogy to better conceptualize this from the Ethereum Foundation is “Imagine Ethereum is a spaceship that isn't quite ready for an interstellar voyage. With the Beacon Chain, the community has built a new engine and a hardened hull. After significant testing, it's almost time to hot-swap the new engine for the old mid-flight.”
This reduces Ethereum's energy consumption by more than 99%. This means that Ethereum is now Environmental, Social, and Governance (ESG) compliant, which has been a regulatory concern dissuading businesses from participating in novel sectors such as DeFi and NFTs.
This has been an overarching concern as of late, largely centered around the carbon footprint of proof-of-work blockchains.
The Merge will also reduce Ethereum’s issuance of ETH by roughly 90%, according to ultrasound.money.
Ethereum developers will now focus on growing the blockchain’s scalability via rollups. Rollups, often referred to as layer 2 networks, bundle transactions on their own respective chains and settle them en masse on Ethereum. This divvying approach allows layer 2s to execute vastly cheaper and faster transactions, while still receiving the benefit of Ethereum’s security (albeit with some compromises).
For the latest news and updates about The Merge, make sure to check out our live coverage.