ETH merge: how to save fees and prepare for the next upgrade

The Ethereum Merge, one of the most significant events in the crypto and blockchain space since the last Bitcoin halving, took place in mid-September after several years of work and planning by Ethereum’s developers.

Effects of the Ethereum Merge

The Ethereum Merge update upgraded the Ethereum network from a proof-of-work model to a proof-of-stake consensus one, leaving the energy-inefficient mining method of blockchain validation behind. This drastically reduced Ethereum’s energy consumption by more than 99%, a welcome move at a time when the environmental impact of cryptocurrency is a growing concern in the industry and the world at large.

Ethereum users must now stake Ethereum (ETH) tokens to validate transactions. , which makes the blockchain even more secure as a malicious actor must own a majority of staked ETH to validate a fraudulent block.

Ethereum is now issued to those who participate in staking, lowering the barrier to entry into the network, particularly for those who use staking pools. Because a much smaller amount of ETH is required to reward validators than what was required to reward miners, ETH issuance has gone down since the Merge. However, the crypto market as a whole would have to improve before Ether becomes a deflationary cryptocurrency.

The price of Ethereum has gone down by around 20% since the Merge, still caught up in the crypto bear market that has kept downward pressure on Bitcoin (BTC) and other cryptocurrencies. Aside from the aforementioned deflationary potential of ETH in the future, there is another scheduled upgrade coming up that Ethereum traders should watch out for.

What’s next for Ethereum?

In October, the Ethereum Foundation released its plans for the next upgrade, dubbed Shanghai. This new package of updates is slated to be completed by September 2023, with expected adjustments and refinements as Ethereum developers progress and decide what to prioritise.

Among the Ethereum Improvement Protocols (EIP) that are likely to be part of the Shanghai upgrades, one of the most anticipated would be a reduction in gas (user fees) on Layer 2 protocols, which include popular crypto projects such as Polygon (MATIC).

Another important update for Shanghai should be the ability to withdraw staked ETH. Currently, validators need to have at least 32 staked Ethereum tokens, the equivalent of over $40,000 at today’s prices (28 October 2022). Until the Shanghai update is implemented, these staked ETH tokens are locked as collateral and unable to be withdrawn or traded. As you can imagine, Ethereum validators are keen to have withdrawals as part of the next major network upgrade.

Finally, improved smart contract functionality is also planned for PoS Ethereum. The Ethereum network remains the foundation for decentralised autonomous organisations (DAOs), non-fungible tokens (NFTs) and decentralised finance (DeFi), and planned updates to Ethereum include processes to make all these important elements of the crypto industry faster, more stable and more scalable.

The long-term value of Ethereum

Given how important Ethereum is to so many parts of the cryptocurrency ecosystem, it’s good that the network continues to evolve and improve. For traders and investors, this should add value to ETH tokens as blockchain solutions see wider adoption across the future economy.

Ethereum co-founder Vitalik Buterin has said that modern Ethereum is about 55% complete and has yet to realise its full potential. From an investment standpoint, the current ETH price of around $1,340 could be a cheap buy-in if the token rises again and breaks its $5,000 all-time high. Certainly, the work of Ethereum developers will mean that the currency should only become more relevant over time. Now, after the merge upgrade, it’s even cheaper to trade Ethereum on StormGain.

Save money on Ethereum trades with StormGain

StormGain is an all-in-one cryptocurrency platform for trading, investment, and exchange of over 50 top cryptocurrencies, indices and tokenised assets. Since the Ethereum blockchain switched from the proof-of-work consensus mechanism to proof-of-stake, the network commissions for transactions have significantly dropped.

With this in mind, StormGain has decided to lower withdrawal commissions for Ethereum tokens on the platform. Here are the low rates now available on StormGain:

• For USDT/USDC/DAI: The fixed withdrawal fee has been lowered from 35 USDT/USDC/DAI to 7 USDT/USDC/DAI
• For ETH: The fixed withdrawal fee has been lowered from 0.008 ETH to 0.0023 ETH

These low withdrawal fees for ETH are only part of the suite of benefits for StormGain users, which include low commissions across the board for crypto trades, advanced analytics and trading signals, interest on cryptocurrency holdings and even a free built-in Bitcoin cloud miner.

Available on the web or as an easy-to-use smartphone app, StormGain offers the best perks in the business for crypto traders. Register in just a few seconds and try a demo account to see how StormGain can help you maximise your gains!