Ethereum merge

Ethereum Merge in trouble? Developers find bugs ahead of the planned update

Ethereum developer Péter Szilágyi announced that there was a bug that resulted in data loss in the latest release.

While the upcoming ETH Merge is one of the most anticipated events in the crypto community at the moment, it’s not free from hiccups. However, Ethereum developers are quick to respond to the issues that arise.

Péter Szilágyi, an Ethereum software developer, has announced on Twitter that they have found a regression that results in a corrupted state. He explained that it was probably one of the pull requests that had  merged toward the new storage model or online pruner. 

In a later update, the developer highlighted that the problem will likely affect those who are running the release in terms of corrupting their database and resulting in the loss of data. He added that the issue of data loss happens on shutdown, and this is why their tests were unable to catch the bug.

Despite the issues, the developers were able to provide a fix after a day. Go Ethereum released a hotfix to patch the bug. The team advised those who’ve updated to roll back and rerun and see if everything is working fine. They tweeted:

After the patch’s release , Szilágyi advised the community to wait until the builders are finished to ensure that they will be on the “good version.” The developer apologized on Twitter for missing the issue during the testing phase and promised to figure out how to do better stress tests. The developer also thanked those who had contributed to helping figure out the issue. 

Related: Ethereum Foundation clarifies that the upcoming Merge upgrade will not reduce gas fees

Meanwhile, in a Cointelegraph interview, economist Lex Sokolin described the potential economic effects of the upcoming ETH Merge. According to Sokolin, the Merge will give a less risky way to stake Ether (ETH) and possibly standardize the interest rates within the Web3 space.

Apart from economic effects, the upcoming ETH Merge also pushes miners to make a choice. Some say that a solution for miners may be a proof-of-work (PoW) Ethereum hard fork. On the other hand, some mining pools have shown that they are shifting to staking.

Ethereum community splits over solutions for transaction censorship

Social slashing and even a user-activated soft fork have been suggested as possible responses to the threat of transaction censorship on Ethereum.

The Ethereum community has been divided over how to best respond to the threat of protocol-level transaction censorship in the wake of the United States government sanctions on Tornado Cash-linked addresses. 

Over the last week, Ethereum community members have proposed social slashing or even a user-activated soft fork (UASF) as possible responses to transaction-level censorship on Ethereum, with some calling it a “trap” that will do more harm than good and others stating its necessary to provide “credible neutrality and censorship resistance properties” on Ethereum.

The heated debate comes after Ethereum miner Ethermine elected not to process transactions from the now U.S. sanctioned Ethereum-based privacy tool Tornado Cash, which has prompted members of the Ethereum community to worry about what would happen if other centralized validators did the same.

The Ethereum community is also debating the effectiveness of social slashing to combat censorship on the Ethereum network, as the strategy could lead to a chain split with some validators processing transactions on the censorship-less chain and the others validating only the OFAC-compliant chain.

Social slashing is the process whereby validators have a percentage of their stake slashed if they don’t correctly validate the incoming transactions or otherwise act dishonestly.

This may become a significant issue if regulators require major centralized staking services like Coinbase and other major centralized pools, which together stake more than 50% of Ether (ETH) in the Ethereum Beacon 2.0 chain to only validate OFAC-compliant chains.

Founder of Cyber Capital Justin Bons argues that slashing “is a trap” that “represents a greater risk than the OFAC regulation” and will not be a viable solution to tackle censorship at the protocol level.

In a 21-part Twitter thread on Monday, Bons said that social slashing exchanges may “deprive innocent users of their deposits,” which would “violate their property rights.”

Bons also said that too many validators complying with law enforcement on Ethereum would “lead to a chain split,” at the point at which “censors start ignoring or do not attest blocks that contain OFAC violating TXs.”

Founder of Ethereum podcast The Daily Gwei Anthony Sassano wrote on Twitter on Saturday that “collateral damage is inevitable in social slashing […] it’s worth it to protect Ethereum’s credible neutrality and censorship resistance properties.”

Meanwhile, Geth developer Marius Van Der Wijgen shared a similar sentiment stating that preserving censorship on the Ethereum network should be the Ethereum community’s highest priority:

“If we allow censorship of user transactions on the network, then we basically failed. This is *the* hill that I’m willing to die on.”

“If we start allowing users to be censored on Ethereum then this whole thing doesn’t make sense and I will be leaving the ecosystem. […] I think censorship resistance is the highest goal of Ethereum and of the blockchain space in general, so if we compromise on that, there’s not much else to do, in my opinion,” he added.

Related: Tornado Cash ban could spell disaster for other privacy protocols — Manta co-founder

Crypto researcher Eric Wall added that to date, censorship resistance has served as a core property on the Ethereum network and that while we’re seeing some censorship on the front end, “it’ll only get bad if censorship starts happening side Ethereum itself.”

The Tornado Cash sparked censorship debacle has plagued the Ethereum community for over a week now.

Aave calls on members to commit to Ethereum PoS chain

The outcome will give a good indication of where AAVE tokenholders stand ahead of the upcoming ETH hard fork.

Aave (AAVE) tokenholders have been asked to take part in an Aave Request for Comment (ARC) that would require them to ”commit” to Ethereum’s proof-of-stake (PoS) consensus.

The ARC, proposed on Tuesday, comes in light of Ethereum’s upcoming transition to proof-of-stake. It calls for members to select the Ethereum mainnet running under PoS consensus as the new “canonical” governance system while also giving power to an authority to shut down any Aave deployments on any alternative Ethereum forks. 

The proposal will soon be made on Aave’s decentralized autonomous organization (DAO), which allows AAVE tokenholders to vote on software developments and updates to the Aave protocol.

As outlined on Aave’s governance website, the proposal comes with two main specs. Firstly, members will formally signal that the Aave DAO deployed on Ethereum mainnet’s PoS consensus is the “canonical governance [mechanism]” of the Aave DAO and Aave markets.

Secondly, a signal will give the Community Guardian the authority to shut down any Aave deployments on any other forks that arise from the Ethereum Merge.

The outcome of the governance vote should give a good indication as to where Aave members stand with respect to Ethereum’s transition to PoS.

In the report, Aave also declared that its code was “fully functional” with Ethereum’s consensus change, which was done by deploying Aave v3 on the Ropsten and Goerli testnets during the Merge tests.

The Ethereum Merge is set to take effect on Sep. 15, according to the latest tentative schedule set by Ethereum core developer Tim Beiko.

Related: Aave DAO approving overcollateralized stablecoin splits crypto community

Having first been deployed on the Ethereum mainnet, Aave is now on Avalanche, Arbitrum, Optimism, Polygon, Fantom and Harmony. However, $5.44 billion, or 72.6%, of Aave’s total value locked (TVL) resides on Ethereum, so any alternative Ethereum forking that stems from the Merge could impact the Aave market and token price.

The price of the AAVE token is $109.95 at the time of writing. Aave is currently the third largest DAO by market cap of $1.54 billion after Uniswap and ApeCoin.

Scaramucci highlights key factors why crypto market will soon recover

Anthony Scaramucci cited the Merge, improving macro indicators such as waning inflation, key business partnerships and pumping crypto prices as reasons for his optimism moving forward.

Founder and managing partner of Skybridge Capital, Anthony Scaramucci, has an optimistic outlook for the future of crypto markets, advising investors to “see through the current environment” and “stay patient and stay long term.”

In an interview with CNBC, the hedge fund manager spoke about his belief that several recent developments in the crypto space could spark “a lot more commercial activity.”

In particular, he highlighted the ever-improving Lightning Network, the two-layer payment protocol layered on top of Bitcoin, BlackRock’s partnership with Coinbase, and their subsequent establishment of a Bitcoin (BTC) private trust fund as positive signs for the future:

“Finally, CEO Larry Fink is seeing institutional demand for digital assets. Otherwise, he wouldn’t be setting up those products, and he wouldn’t be teaming up with Coinbase.”

“I just want to remind people that there are only 21 million Bitcoins out there, and you’ll have a demand shock with very little supply,” he added.

Ethereum Merge on the horizon

Scaramucci cited the upcoming Ethereum Merge scheduled for Sept. 15, which will change the network’s consensus mechanism to proof-of-stake (PoS), as an event that could affect the market price of the second largest cryptocurrency.

In his opinion, traders are buying the cryptocurrency based on the potential positives the merger could bring, but he also notes they could turn around and sell just as fast.

“A lot of traders are probably buying that rumor; they will probably sell on the news of that merger,” he said, adding that “I would caution people not to do that; these are great long term investments,” he added.

Recovery slow but steady over the last month

Despite the ongoing crypto bear market, many top cryptocurrencies have posted modest gains. BTC is up 20% in the last month to sit at $24,954 at the time of writing, while the price of Ether (ETH) has surged a hefty 62% to $1999, according to data from Cointelegraph Markets Pro and TradingView.

Scaramucci noted that he’d seen a resurgence of investor interest, and with better-than-expected inflation numbers in July, he believes the global economy can return to its strong 2019 Quarter 4 status within 6 to 12 months.

Overall, Scaramucci has a positive outlook for the crypto market and cautions investors to take care with knee-jerk reactions to bad news and emotion-based trading.

His firm believes that BTC could see an unprecedented upswing over the next six years.

“If we are right, if BTC goes to $300,000 USD a coin, it will not matter if you bought it at $20,000 USD, $60,000 USD; the future is upon us; it’s happening sooner than I thought,” he said:

“If you’re out of the market for the ten best days, you’ve reduced your return from a 7.5% return to a 2% return; I don’t want us to start herking and jerking the portfolio based on emotion.”

“I think that’s the message I’m trying to send to investors; just relax; we see a pretty optimistic scenario for BTC, ETH, ALGO and Solana (SOL) over the next 12 to 24 months,” he added.

Scaramucci mentioned his firm has a position in Ethereum competitor Algorand, but by far their two most significant positions are still in BTC and ETH.

Ethereum Merge on track as Goerli test merge successfully finalized

With the Goerli merge going successfully, there is growing confidence that there will be no further delays to the Ethereum Merge set for mid-September.

After Ropsten and Sepolia, Goerli was the last remaining testnet scheduled to undergo the Merge, officially becoming a proof-of-stake (PoS) blockchain as of 1:45 am UTC, Aug. 11.

The Goerli testnet merge has been finalized without any major issues today, suggesting that there will be no delays to the tentative Ethereum Merge date set for Sept. 19.

Numerous key devs and figures in the Ethereum ecosystem have taken to Twitter to share their enthusiasm over the successful merge, such as core dev Preston Van Loon and podcaster/ETH proponent Anthony Sassano, sassal0x on Twitter, who bullishly noted to his 216,400 followers that “next up is (finally) the Ethereum mainnet!! The Merge is coming.”

However, some noted there were minor issues that were also present in the previous two testnet merges.

Ethereum developer Marius van der Wijden noted that there was some “confusion on the network because two different terminal blocks and lots of non-updated nodes” that slowed the process down slightly but stated that things were looking “quite good” anyway.

While lead Ethereum dev Tim Beiko also shared a screenshot as soon as Goerli’s switch to PoS went through.

There is growing confidence now that the highly anticipated Ethereum mainnet merge with the PoS-based Beacon Chain will go through without a hitch, given that Beiko previously stated that the major upgrade will go through on (or close to) his proposed date of Sept. 19 if the final merge trail runs went through successfully.

In what is being seen as one of the most significant upgrades in blockchain history, the Merge will significantly reduce Ethereum’s energy consumption while bringing the network one step closer to its long-term scalability, security and sustainability goals.

Once the Merge is complete, the next major landmark will be the multi-phased sharding upgrade that will significantly enhance the “distribution of data storage requirements, enabling rollups to be even cheaper, and making nodes easier to operate,” according to Ethereum’s website.

Related: Optimism TVL surges nearly 300% M/M ahead of The Merge upgrade

Sharding essentially involves spreading the Ethereum database horizontally across shard chains, giving the network greater capacity while also taking the strain off the core network.

The price of Ether (ETH) has been on a meteoric pump in the lead-up to the Merge, with the price gaining 72.2% over the past 30 days to sit at $1,890 at the time of writing.


Tether also confirms its throwing weight behind the post-Merge Ethereum

”We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens,” Tether stated.

Hot on the heels of an official announcement from USD Coin (USDC) issuer Circle Pay, stablecoin giant Tether has now also officially confirmed its support behind Ethereum’s upcoming Merge upgrade and switch to a proof-of-stake (PoS) consensus mechanism-based blockchain.

The announcement came on the same day as its stablecoin competitor, who pledged they will only support Ethereum’s highly anticipated upgrade.

In a Tuesday statement, Tether labeled the Merge one of the “most significant moments in blockchain history” and outlined that it will work in accordance with Ethereum’s upgrade schedule, which is currently slated to go through on Sept. 19:

“Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to POS is not weaponized to cause confusion and harm within the ecosystem.”

“Tether will closely follow the progress and preparations for this event and will support POS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long term health of the DeFi ecosystem and its platforms, including those using our tokens,” Tether added.

While the official statement only came out today, the stablecoin issuer’s chief technology officer Paolo Ardoino had already previously indicated in July that they planned to support the post-Merge Eth2.

Tether (USDT) is currently the largest stablecoin in crypto, with a total market cap of $66.6 billion, while USDC is relatively close behind at $54.1 billion, according to CoinGecko. Both stablecoins have a significant amount of their circulating supply on Ethereum’s current proof-of-work (PoW) blockchain, with USDT at $32.3 billion and USDC taking the top spot at $45.1 billion at the time of writing.

Given the size of these stablecoins and their dominance over the stablecoin market, the show of this support in this instance should result in a smooth transition for the Ethereum, Tether and USD Coin ecosystems, as well as the broader crypto market as a whole.

Related: Institutions flocking to Ethereum for 7 straight weeks as Merge nears: Report

However, as Ethereum co-founder Vitalik Buterin recently warned, their power could potentially cause issues in future Ethereum hard forks, as centralized entities such as Tether and Circle could choose to utilize the forked chain of their own preference rather than what the Ethereum community has proposed.

“I think in the further future, that definitely becomes more of a concern. Basically, the fact that USDC’s decision of which chain to consider as Ethereum could become a significant decider in future contentious hard forks,” he said.

This week Ethereum will undergo its final Merge trial via the Goerli testnet, and if all goes to plan, there is an expectation that the Sept.19 Merge date is unlikely to be delayed.