Ethereum Merge Might Happen in August as Testing Enters Final Round

Speaking at the Permissionless 2022 Conference in Florida, the U.S., Ethereum Researcher Justin Drake disclosed that the merge of Ethereum (ETH) might happen in August.

Market insight provider Bankless pointed out. He noted:

“Strong desire to make this happen before difficulty bomb in August. Stars are aligned.”

Meanwhile, Ethereum core developer Preston Van Loon shared similar sentiments that testing was in the final stages and said:

“As far as we know, if everything goes to plan, August—it just makes sense. If we don’t have to move, let’s do it as soon as we can.”

The merge, which will transition the current proof-of-work (PoS) consensus mechanism to a proof-of-stake (PoS), has been elusive because it was slated for June.

Previously, Ethereum lead developer Tim Beiko revealed that the shift would not happen in June as planned. He pointed out:

“It won’t be June, but likely in the few months after. No firm date yet, but we’re definitely in the final chapter of PoW on Ethereum.”

The merge is estimated to be the biggest software upgrade in the Ethereum ecosystem because the PoS algorithm will allow the confirmation of blocks in a more energy-efficient way. After all, it requires validators to stake Ether instead of solving a cryptographic puzzle. 

Validators will take up the role of miners when it comes to the confirmation of blocks based on the amount of ETH staked, acting as collateral against dishonest behaviour. 

The merge is usually regarded as a game-changer that will give the Ethereum network a new face because it is expected to enhance scalability through upgrades like sharding.

Furthermore, it is anticipated to strengthen Ethereum’s quest as a deflationary asset because the second-largest cryptocurrency’s value is speculated to increase based on slashed supply. 

Market analyst Lark Davis had previously opined that he expected the merge to trigger a supply growth rate of -2.8% in the Ethereum network. Moreover, a LuckyHash study noted that the shift would prompt a 1% annual deflation rate. 

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10% of Ethereum Supply Staked in ETH 2.0 in Anticipation of The Merge

Ethereum 2.0, which was recently renamed the consensus layer, continues to gain steam because 12,059,714 ETH has been staked in its deposit contract.


This represents 10% of the entire circulating Ethereum supply of 120,585,605 ETH, according to CoinMarketCap. Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) framework. 


The proof-of-stake algorithm is touted to be more environmentally friendly and cost-effective. It allows the confirmation of blocks in a more energy-efficient way because it requires validators to stake Ether instead of solving a cryptographic puzzle. 


Therefore, validators will take up the role of miners when it comes to the confirmation of blocks based on the amount of ETH staked, acting as collateral against dishonest behavior. 


The transition from PoW to PoS is known as the merge and will act as the biggest software upgrade in the Ethereum ecosystem. Ethereum lead developer Tim Beiko recently disclosed that the merge would not occur in June as planned.


This revelation came days after the first shadow fork that served as the merge trial went live on the Ethereum mainnet. It was to stress test syncing and state growth on the ETH network. The merge is being waited with bated breath because it will enhance Ethereum’s quest to be a deflationary asset. Its value is expected to continue increasing with time on the foundation of slashed supply.


As more investments continue trickling into Ethereum 2.0 deposit contract, confidence in the ETH network is rising in anticipation of the merge.  

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Ethereum Validators Hit 300,000, Non-Zero ETH Addresses Reach ATH

The number of validators on the Ethereum network continues gaining steam after hitting the 300,000 mark. 

Moreover, staked Ether crossed the 9.5 million level to reach 9,599,919 ETH. 


Ethereum 2.0, recently renamed to the consensus layer, intends to transition the network to a proof of stake (PoS) consensus mechanism from the current proof of work (PoW) framework.

Therefore, validators will take up the role of miners when it comes to the confirmation of blocks based on the amount of ETH staked, given that it acts as collateral against dishonest behaviour. 

The transition is slated for Q2 2022, and the PoS consensus mechanism is expected to make the Ethereum network more environmentally friendly and cost-effective. 

Furthermore, this shift is expected to trigger a 1% annual deflation rate, according to research by crypto service provider LuckyHash. 

Non-Zero ETH addresses continue to skyrocket

More participants continue joining the ETH ecosystem, given that the number of non-zero addresses is going through the roof. Market insight provider Glassnode explained:

“The number of non-zero addresses just reached an ATH of 75,960,332.”


Source: Glassnode

Meanwhile, burnt Ether edges closer to the 2 million mark. 1,922,687 ETH has already been burned, according to crypto insight provider DuneAnalytics.

Launched in August 2021, the London Hardfork or EIP 1559 introduced a feature where Ether would be burnt every time it is used in transactions. This has been causing a supply deficit, which prompts a price increase whenever demand rises.

This upgrade also eliminated the usage of other digital tokens for fee payment in the Ethereum Network. Only Ether would be used, thus restoring the unique relevance of the ETH cryptocurrency. Inflationary tendencies were also eradicated. 

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Ethereum Adoption Continues to Scale Heights

More participants continue joining the Ethereum bandwagon, given that addresses holding 0.1 to 1 ETH hit record highs.


Market insight provider IntoTheBlock explained:

“Ethereum adoption is not only about big players. The number of addresses holding between 0.1-1 ETH is currently at an at time high (ATH). In the span of 1 year, the number of these addresses increased by 98%, and now they collectively hold 1.78m ETH (increasing by 4.54% in 1 month).”




Therefore, Ethereum adoption isn’t showing signs of slowing down because addresses having 1 to 10 ETH recently attained a new milestone by hitting the 1 million mark. 


Booming sectors like decentralized finance (DeFi) and non-fungible tokens (NFTs) are increasing Ethereum’s use cases. 


Meanwhile, more investments continue trickling into the recently rebranded ETH 2.0 deposit contract. Crypto analytic firm Glassnode noted:

“The total value in the ETH 2.0 deposit contract just reached an ATH of 9,390,050 ETH.”




Last month, the Ethereum Foundation rebranded ETH 2.0 to the consensus layer to reflect the evolution of the Ethereum roadmap because it had emerged as an inaccurate representation. Furthermore, Ethereum 1.0 was changed to the execution layer. 


The consensus layer seeks to transition the Ethereum network from a proof of work (PoW) consensus mechanism to a proof of stake (PoS) framework, deemed more environmentally friendly and cost-effective. 


On the other hand, Ethereum needs to break the resistance level at $3,500 for sustained bullish momentum. The second cryptocurrency based on market capitalization has not been able to surge above the psychological price of $4,000 since November 2021 when an ATH of $4,850 was set.


“Ethereum is well-positioned to advance higher as IntoTheBlock’s IOMAP shows a small supply barrier at $3,500. Once $ETH breaks above it, expect fireworks,” according to market analyst Ali Martinez. 

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Ethereum Leaves ETH 2.0 In The Past In New Roadmap Rebrand

Ethereum 2.0 is one of the most-anticipated upgrades in crypto presently. The upgrade which will bring better scalability and cheaper prices to the network is nothing short of needed given that demand has driven these two things to its brink on the network. This is why Ethereum developers have been hard at work for two years trying to usher in this new era.

However, it seems that the name ETH 2.0 is no longer doing justice to the upgrades being performed on the network. In a recent announcement, Ethereum Foundation announced that it is retiring the name ETH 2.0 in favor of something that better describes the work being done on the network.

ETH 2.0 Is Now Consensus Layer

In a blog post on its official website, the Ethereum Foundation announced its decision to change the name of the upcoming upgrade from ETH 2.0 to the “Consensus layer”. The post explains that the reason for this was the need for terminology that clearly embodies the changes that were being made to the network.

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ETH 2.0 had worked while at the beginning when the goal was simply to move users from the present proof of work chain, also known as ETH 1.0, to the new proof of stake mechanism. The goal has changed drastically since then.

Related Reading | Ethereum Fee Averages Remain Above $30 Despite 35% Drop. Price Pump Incoming?

For the total completion of the upgrade, developers had discovered that it would take several years to complete. Additionally, the upgrade had evolved at various points to make changes focused on the long-term rather than just moving to the proof of stake mechanism.

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Ethereum price chart from

ETH climbs back to $2,400 | Source: ETHUSD on

The new terminology provides a better understanding of what is being done on the network. This way, users are no longer confused when it comes to distinguishing between the two. This would greatly reduce scams that take advantage of the confusion generated by the terminology by asking them to swap their ETH for ‘ETH2’. It would also clear up the confusion that arises with staking, where stakers might believe they might be getting ‘ETH2’ tokens and not ETH tokens.

How Is Ethereum Price Affected?

The announcement of the new terminology has had no bearing on the value of the altcoin in the market. Ethereum which had suffered greatly in the crash, losing about 40% of its value, has trended upward in the last day. However, the change in value remains insignificant as ETH is still a long way away from hitting the $3,000 point. Prompting users to speculate that the bear market is here.

Related Reading | Market May Be Suffering But Bitcoin And Ethereum Will Pull Back Stronger, Bloomberg Analyst

As for ETH 2.0, now known as the “Consensus layer”, it is still unknown if the scheduled merge will actually take place this year. The project has so far been rocked by delays as devs encounter new issues. But for now, the upgrade remains on track.

As per the announcement, the ethereum base layer, also known as ETH1, will now be called the execution layer. While ETH 2.0 will be referred to as the consensus layer. Both of these layers combined are what make up the Ethereum blockchain.

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A key Ethereum price metric hits a 6 month low as ETH falls below $3K

Ether (ETH) price lost the $3,600 support on Jan. 5 as minutes from the Federal Reserve’s December FOMC meeting showed that the regulator was committed to decreasing its balance sheet and increasing interest rates in 2022.

Even with that looming overhead, Ether has problems of its own, more specifically, the ongoing $40 and higher average transaction fees. On Jan. 3 Vitalik Buterin said that Ethereum needs to be more lightweight in terms of blockchain data so that more people can manage and use it.

The concerning part of Vitalik’s interview was the status of the Ethereum 2.0 upgrade, which is merely halfway implemented after six years. The subsequent roadmap phases include the “merge” and “surge” phases, followed by “full sharding implementation.” When implemented, they will lead to an 80% estimated completion of the network upgrade, according to Buterin.

Ether price at Coinbase, USD. Source: TradingView

For those analyzing Ether’s performance over the past 3 months, the current pricing seems appealing because the cryptocurrency is currently down 34% from its $4,870 all-time high. However, this short-sighted view disregards the 560% gain Ether had accrued up till Nov. 10, 2021.

Furthermore, the network’s adjusted total value locked (TVL) has dropped by 17% since Ether’s price peak.

Ethereum network total value locked, USD. Source: DefiLlama

As shown above, the network’s TVL dropped from $166 billion to the current $138 billion. Meanwhile, competing smart contract networks like Terra saw their TVL increase from $11 billion to $18.7 billion. Fantom also increased the value locked on its smart contracts from $5 billion to $9 billion.

Due to network upgrade delays, worsening macroeconomic conditions and a 3-month long price correction, professional traders are clearly becoming frustrated and anxious.

Ether futures are at the edge of turning bearish

Quarterly futures are usually the preferred instruments of whales and arbitrage desks due to their settlement date and the price difference from spot markets. However, the contract’s biggest advantage is the lack of a fluctuating funding rate.

These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers request more money to withhold settlement longer. Therefore, futures should trade at a 5% to 15% annualized premium in healthy markets. This situation is technically defined as “contango” and is not exclusive to crypto markets.

Ether futures 3-month annualized premium. Source: Laevitas

As displayed above, Ether’s futures contracts premium has come down from 20% on Oct. 21 to a meager 5.5%, just slightly above the neutral market threshold. Although the basis indicator remains positive, it reached the lowest level in 6 months.

The crash below $3,000 on Jan. 10 was enough to drain any bullish sentiment and more importantly, the Ethereum network’s high fees and delayed upgrades might have scared away some investors.

Currently, data shows little sign that bears are ready to take the helm. If this was the case, the Ether futures premium would have turned negative.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.