If you’re wondering where all the speculation has been coming from the answer is of course Ethereum’s transition from proof of work to proof-of-stake which is officially expected to occur between the 10th and 26th of September as per a blog post by the Ethereum foundation.
The merge itself will be preceded by the bellatrix upgrade on the 6th of September which will activate Ethereum’s consensus layer on the proof-of-stake beacon chain. The magic that happens between the 10th and 20th of September will be the actual transition of the execution layer from proof of work to proof of stake.
As amazing as it is to finally get confirmation of one of the most highly anticipated milestones in the history of cryptocurrency the fact of the matter is there could still be some unforeseen issues as was the case with the discovery of a small bug on the very day that the final dates were announced.
Don’t get me wrong Ethereum’s core developers are definitely prepared for the upgrade and have likely found all the bugs that any human being could hope to find. From what I’ve heard and seen most of the concerns are about damaging bugs in other places such as Ethereum’s decentralized applications.
As we’ve seen over the last few days there’s no shortage of leverage related to the merge and lots of this leverage is actually within Ethereum’s own defy ecosystem.
It’s possible if not likely that there could be pricing issues during the merge that lead to unwanted liquidations in some d5 protocols not only that but it’s easy to forget that centralized exchanges are effectively part of the Ethereum stack as well I’m sure many of you have seen the announcements from Coinbase and Binance that they will be pausing deposits and withdrawals for ETH and ERC20 tokens around the time of the merge.
Although Binance provided an exact date for its deposit and withdrawal pause it appears that Coinbase didn’t and I suspect that not all exchanges will provide exact dates for whatever reason.
Never mind the possibility that the exchanges which did provide dates could be forced to change them last minute. As such you should consider moving any ETH or ERC20 tokens you plan on selling on or around the merge to a centralized exchange in the next week or so.
Just make sure you’re using a regulated exchange and bear in mind that many exchanges could see outages due to all the trading activity.
Moving of your ETH and ERC20 tokens to another secure smart contract cryptocurrency could be a good way of hedging yourself against any exchange outages.