How does the Ethereum Merge affect me as a Luno customer?
The Ethereum Merge is set to take place sometime around mid-September, at which point the Ethereum network will switch from a proof-of-work (POW) consensus mechanism to one that uses proof-of-stake (POS), a move that aims to make the network more efficient and scalable in the long run.
Is there an exact date?
At the moment, the Merge is pencilled in for 15 September, or thereabouts, but it is dependent on network activity.
For all the latest updates about the Ethereum Merge, check out this status page.
Why is it called the Merge?
Imagine the Ethereum blockchain as a railway line. Before the incoming Merge, all activity on this railway line has been recorded using a method called proof-of-work. Then came the idea to change this method to a more efficient one, called proof-of-stake.
To start this process, another line, using proof-of-stake, was added, running in parallel to the existing one.
The existing line is called the Mainnet, which has been serving the Ethereum network since the very beginning, and the new line running in parallel is called the Beacon Chain.
The Merge is the merging of these two blockchains, the two railway lines, into one proof-of-stake Ethereum blockchain. The Merge is the final station where it’s only proof-of-stake going forward.
How does it affect me?
Aside from price movements that may arise from increased investor interest around the date of the Merge, the Ether (ETH) in your Luno wallet won’t be affected.
If the Merge is successful, the transition to POS will happen completely in the background, and there won’t be any changes to your ETH when it is done. It will be business as usual.
Will I be able to send and receive Ethereum while the Merge is happening?
For safety reasons, we will be suspending sends and receives of Ethereum and ERC-20 coins for a few hours before and after the Merge.
This means that during this time you won’t be able to send and receive Ethereum, USDC, Uniswap (UNI), and Chainlink (LINK). These parameters may vary on the day of the Merge.
When sending and receiving has been enabled again, there may be a processing delay in the transactions of the affected coins.
And deposits and withdrawals?
During the Merge, we will also be pausing deposits and withdrawals on all the affected coins until the Ethereum network is stable again.
Trading will not be affected.
What happens if I send and receive coins just before or while the Merge is taking place?
You won’t be able to send coins while the Merge is happening. Any coins received during this time will only reflect in your wallet after sends and receives have been enabled. If the coins are received just before the planned downtime, they will reflect as pending.
All confirmed received coins will be in your wallet once we enable sends and receives again.
Should I be doing anything?
No, sit back and let the developers handle this one.
What is Luno’s stance on the Merge?
We expect the Merge to be successful and will continue to support Ethereum (ETH) in its new form.
Should there be a fork leading to support for a proof-of-work blockchain, we will continue to monitor the situation and decide whether to support this blockchain.
If this were to happen, it won’t have any impact on the new Ethereum POS blockchain, which will continue to reflect ETH on Luno.