The Merge was the joining of the original execution layer of Ethereum (the Mainnet that has existed since genesis) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the network to be secured using staked ETH. It was a truly exciting step in realizing the Ethereum vision—more scalability, security, and sustainability.
Initially, the Beacon Chain shipped separately from Mainnet. Ethereum Mainnet - with all its accounts, balances, smart contracts, and blockchain state - continued to be secured by proof-of-work, even while the Beacon Chain ran in parallel using proof-of-stake. The Merge was when these two systems finally came together, and proof-of-work was permanently replaced by proof-of-stake.
Imagine Ethereum is a spaceship that launched before it was quite ready for an interstellar voyage. With the Beacon Chain, the community built a new engine and a hardened hull. After significant testing, it became time to hot-swap the new engine for the old one mid-flight. This merged the new, more efficient engine into the existing ship enabling it to put in some serious light years and take on the universe.
Proof-of-work secured Ethereum Mainnet from genesis until The Merge. This allowed the Ethereum blockchain we're all used to to come into existence in July 2015 with all its familiar features—transactions, smart contracts, accounts, etc.
Throughout Ethereum's history, developers prepared for an eventual transition away from proof-of-work to proof-of-stake. On December 1, 2020, the Beacon Chain was created as a separate blockchain to Mainnet, running in parallel.
The Beacon Chain was not originally processing Mainnet transactions. Instead, it was reaching consensus on its own state by agreeing on active validators and their account balances. After extensive testing, it became time for the Beacon Chain to reach consensus on real world data. After The Merge, the Beacon Chain became the consensus engine for all network data, including execution layer transactions and account balances.
The Merge represented the official switch to using the Beacon Chain as the engine of block production. Mining is no longer the means of producing valid blocks. Instead, the proof-of-stake validators have adopted this role and are now responsible for processing the validity of all transactions and proposing blocks.
No history was lost in The Merge. As Mainnet merged with the Beacon Chain, it also merged the entire transactional history of Ethereum.
The Merge did not change anything for holders/users.
This bears repeating: As a user or holder of ETH or any other digital asset on Ethereum, as well as non-node-operating stakers, you do not need to do anything with your funds or wallet to account for The Merge. ETH is just ETH. There is no such thing as "old ETH"/"new ETH" or "ETH1"/"ETH2" and wallets work exactly the same after The Merge as they did before—people telling you otherwise are likely scammers.
Despite swapping out proof-of-work, the entire history of Ethereum since genesis remained intact and unaltered by the transition to proof-of-stake. Any funds held in your wallet before The Merge are still accessible after The Merge. No action is required to upgrade on your part.
The Merge marked the end of proof-of-work for Ethereum and start the era of a more sustainable, eco-friendly Ethereum. Ethereum's energy consumption dropped by an estimated 99.95%, making Ethereum a green blockchain. Learn more about Ethereum energy consumption.
The Merge also set the stage for further scalability upgrades not possible under proof-of-work, bringing Ethereum one step closer to achieving the full scale, security and sustainability outlined in its Ethereum vision.
The term 'Eth2' has been deprecated. After merging 'Eth1' and 'Eth2' into a single chain, there is no longer any need to distinguish between two Ethereum networks; there is just Ethereum.
To limit confusion, the community has updated these terms:
- 'Eth1' is now the 'execution layer', which handles transactions and execution.
- 'Eth2' is now the 'consensus layer', which handles proof-of-stake consensus.
These terminology updates only change naming conventions; this does not alter Ethereum's goals or roadmap.
The Ethereum upgrades are all somewhat interrelated. So let’s recap how The Merge relates to the other upgrades.
The Merge represents the formal adoption of the Beacon Chain as the new consensus layer to the original Mainnet execution layer. Since The Merge, validators are assigned to secure Ethereum Mainnet, and mining on proof-of-work is no longer a valid means of block production.
Blocks are instead proposed by validating nodes that have staked ETH in return for the right to participate in consensus. These upgrades set the stage for future scalability upgrades, including sharding.The Beacon Chain
In order to simplify and maximize focus on a successful transition to proof-of-stake, The Merge upgrade did not include certain anticipated features such as the ability to withdraw staked ETH. This functionality was enabled separately with the Shanghai/Capella upgrade.
For those curious, learn more about What Happens After The Merge(opens in a new tab), presented by Vitalik at the April 2021 ETHGlobal event.
Originally, the plan was to work on sharding before The Merge to address scalability. However, with the boom of layer 2 scaling solutions, the priority shifted to swapping proof-of-work to proof-of-stake first.
Plans for sharding are rapidly evolving, but given the rise and success of layer 2 technologies to scale transaction execution, sharding plans have shifted to finding the most optimal way to distribute the burden of storing compressed calldata from rollup contracts, allowing for exponential growth in network capacity. This would not be possible without first transitioning to proof-of-stake.Sharding