FTX decided to halt “deposits and withdrawals until the Merge is accomplished and networks are stable” despite Ethereum developers’ assurances of zero downtime.
The Merge, one of the most anticipated Ethereum updates, was supposed to have zero downtime, but members of the cryptocurrency community made the decision to take preventative action to guarantee the security of investor funds. In this effort, cryptocurrency exchange FTX declared that it would freeze all trades of Ether (ETH) on different blockchains until the September update is finished.
In order to save energy and enable sharding, the Merge upgrade will permanently switch the Ethereum blockchain’s consensus process from proof-of-work (PoW) to proof-of-stake (PoS).
The terminal total difficulty (TTD), which ensures the transition based on the total mining power that goes into generating a chain, is how Ethereum developers claim the Merge is planned to switch to PoS with zero downtime. FTX decided to halt “deposits and withdrawals until the Merge is finalized and networks are stable” despite the justification.
In order to ensure that settlement is accurate as the ETH merge draws near, FTX will temporarily stop secondary chain ETH blockchain transactions; the main chain ETH transfers will remain active for a longer period of time.
The start time for the trade suspension for Ethereum on different blockchains has been allocated, however, it is still subject to change based on potential issues.
It is your obligation to understand the ramifications of this message, FTX added as it made clear that the cryptocurrency exchange is not responsible for any losses in the event of significant price swings.
The Ethereum Foundation clarified that the impending upgrade will not lower gas fees, dispelling one of the major myths surrounding The Merge. The official statement reads:
“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput.”
The upgrade’s sole goal is to do away with the necessity for energy-intensive mining.