Ethereum deposits and withdrawals will not be processed by Coinbase during the merger. For many months to come, even after the integration, staked ETH won’t be accessible for withdrawal.
During September’s “merge” update, Coinbase, the biggest cryptocurrency exchange in the US, will temporarily prohibit ETH deposits and withdrawals.
Tuesday, the exchange published a blog post outlining what users of Coinbase and Ethereum may anticipate from the network’s long-awaited metamorphosis.
Making the Transition Easy
The suspension, which will affect all on-chain ETH and ERC-20 token transfers, is reportedly being implemented by Coinbase to make sure the update is accurately recorded inside the company’s internal systems.
It’s not anticipated that the trading of assets currently on the market would be affected. The integration is anticipated to be “seamless” from the perspective of the users.
“We view this event as a major step toward scaling adoption of the crypto economy and will support it in a variety of ways that align with our mission to increase economic freedom in the world,” said the company.”
A widely anticipated Ethereum update that has been under development for six years is known as “The Merge.”
It will change the protocol’s proof of work (POW) consensus method to proof of stake (POS), which is expected to reduce energy usage by 99.95%.
The changeover also prepares Ethereum for its scaling strategy, which will aid it in addressing problems with high transaction fees. The Goerli public test net merging is finally scheduled to occur on September 15th after finishing last week.
Prior to the event, Coinbase warns customers to be on the lookout for merge-related frauds that might ask for money to “upgrade to ETH2” even though there is no token connected to the upgrade.
The exchange said that “one’s action on one’s side is necessary to upgrade during this time; one’s funds will be safe and secure.”
Prior to the merging, there will be a regular update that will cause 10 minutes of downtime for Coinbase Cloud users that operate node infrastructure.
The change should have little to no effect on customers of Coinbase’s self-custodial wallet software, according to the company.
How Does Staked ETH Fare?
According to Coinbase, after the merging, all “ETH2” deposits that users have presently placed with the platform would appear under their “ETH” balance. Balances won’t become withdrawable until the beginning of 2023, however, they will still be shown individually as “staked ETH.”
More than 10% of the total amount of ETH in circulation is presently staked in the ETH 2.0 deposit contract. According to Glassnode, four staking providers—Coinbase, Binance, Kraken, and Lido—manage more than 50% of these funds.