Crypto.com DeFi Wallet will be supporting The Merge, the most significant update to the Ethereum network to date. This blog post will explain what The Merge is, what it entails, and what users can expect before, during, and after the network upgrade is complete.
Note, no action is required from Crypto.com DeFi Wallet users before the Merge, and your funds will remain accessible. We do encourage users to proceed with transactions after The Merge to ensure the safety of the funds during The Merge.
What is The Merge?
The Merge is the process of ‘merging’ Ethereum’s Beacon Chain (or the ‘consensus layer’) with its Mainnet (or the existing ‘execution layer’). The plan is to swap out the current proof-of-work (PoW) algorithm on the consensus layer and replace it with the proof-of-stake (PoS) consensus mechanism that the Beacon Chain provides.
How It Will be Carried Out
The Merge consists of a sequence of two upgrades — Bellatrix on the Consensus Layer followed by Paris on the Execution Layer.
Bellatrix upgrades the Beacon Chain to be ‘Merge-aware’, embedding the Beacon Chain with The Merge logic as validators begin monitoring the PoW chain to initiate transition. Bellatrix was scheduled for epoch 144,896 on the Beacon Chain and it was completed on 6 September 2022.
Paris is the actual Merge, where Ethereum swaps its consensus mechanism from PoW to the Beacon Chain’s PoS. The Paris upgrade activates at the chosen Terminal Total Difficulty (TTD) of 58750000000000000000000, expected to take place between 10 and 20 September 2022.
The target date is currently 15 September 2022. However, this date might change as the TTD is based on the PoW consensus mechanism’s difficulty, which is not easy to pinpoint. Once the execution reaches the TTD, The Merge will be complete.
Possible Scenarios of The Merge
There are two likely scenarios that will happen during The Merge:
- Scenario A:
No new tokens are created during The Merge. Transactions for ETH and ERC20 tokens in the Crypto.com DeFi Wallet will not be suspended. Users are encouraged to proceed with their transactions only after The Merge is complete.
- Scenario B:
The blockchain splits into two, with one following the updated PoS blockchain, and the other following the forked PoW blockchain. The ‘ETH’ ticker will be used for tokens generated on the PoS chain, while tokens generated on the PoW chain will be forked tokens. Users are encouraged to proceed with their transactions using ETH and ERC20 tokens only after The Merge is complete.
Before the Paris upgrade, forked token creators may take snapshots of users’ ETH balances. Supported forked tokens will be distributed to users proportionate to their ETH holdings and will then be available for withdrawals. Details regarding the distribution will be determined by the forked POW blockchain and will be included in a separate announcement. Crypto.com DeFi Wallet reserves the right to update the treatment of any blockchain split in a further announcement.
What Crypto.com DeFi Wallet Will Support
- In the event of Scenario B, Crypto.com DeFi Wallet reserves its full discretion whether to support the forked PoW blockchain. If Crypto.com DeFi Wallet decides to support the forked PoW blockchain, the forked token will go through the same listing review process as all other tokens. We will notify users in a separate announcement if the forked tokens will be listed.
- Crypto.com DeFi Wallet will not support the forked PoW blockchain if the forked PoW blockchain does not prove to be stable. Tokens created during The Merge that are deemed as illegitimate in Crypto.com DeFi Wallet’s sole discretion will not be supported. Crypto.com DeFi Wallet reserves its full discretion whether to support forked tokens created during the Merge.
- Wrapped ETH may or may not qualify for distribution of forked tokens, depending on the specifics of the fork projects, which continue to evolve.
Trading and Sending/Receiving Tokens
To ensure the safety of users’ funds during and after The Merge, users are encouraged to continue trading, sending, and receiving ETH and all ERC20 tokens only after the upgrade is complete.
- You will not need to do anything to protect your funds before The Merge. Any funds held in your wallet will still be accessible. No action is required on your part.
- The entire history of Ethereum since genesis will remain intact and unaltered after the transition to PoS.
- Be on high alert for scams trying to take advantage of users during this transition. There is no ‘ETH2’ token and you do not need to take any further action to keep your funds safe.
- Crypto.com DeFi Wallet reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.
Kindly refer to status.crypto.com for all the latest updates.
We thank users for their support and understanding.