Consolidate Definition

What Is the Merge?

The Merge refers to a critical upgrade in the history of Ethereum, completed in 2022. This event marked Ethereum’s transition from a proof-of-work (PoW) consensus mechanism, which relied on mining and computational power, to a proof-of-stake (PoS) system based on staking and validator participation. The Merge was not about issuing new coins or launching a new blockchain; rather, it fundamentally changed Ethereum’s consensus mechanism to enhance efficiency and security.

Within the community, this upgrade is commonly called “The Merge.” It unified the original execution layer (responsible for processing transactions and smart contracts) with the new consensus layer (responsible for block ordering and network security). After The Merge, validators—not miners—are now responsible for maintaining the network’s security.

Why Is the Merge Important?

The Merge is significant because it reshapes Ethereum’s security and economic model. It drastically reduces energy consumption and allows ETH holders to participate in network security and earn rewards. Furthermore, The Merge lays the groundwork for future scalability upgrades and transaction fee optimization.

Historically, Ethereum needed to address high energy consumption and improve sustainability during periods of heavy network usage. The Merge achieved these goals, enabled better control over issuance and inflation, and established a foundation for years of planned scaling developments.

How Does the Merge Work? Key Technical Principles

The core mechanism behind The Merge is proof-of-stake. In PoS, block production and transaction ordering are determined by validators who lock up tokens (stake) and follow protocol rules.

Validators are selected in turns to propose new blocks, while other validators attest (sign off) on their validity. If a validator acts maliciously or goes offline, their staked ETH may be slashed or forfeited—a penalty system designed to enforce honest participation.

For more detail on PoS, see What Is Proof of Stake?.

How Is the Merge Different From Proof of Work?

The Merge represents Ethereum’s switch from proof-of-work to proof-of-stake. Under PoW, network security depends on computational power—miners with the most hardware have the highest chance to produce blocks, resulting in significant energy and hardware costs. PoS, in contrast, relies on those willing to stake ETH and maintain continuous uptime, making it much more energy-efficient.

In PoW, miners invest in GPUs or specialized hardware to compete for block rewards; in PoS, validators commit ETH as collateral and operate reliable nodes. PoW security comes from the costliness of amassing computational power; PoS security is enforced by economic penalties for bad behavior and the value of staked funds.

For more on PoW, see Proof of Work Explained.

How Does Ethereum Operate After the Merge?

Post-Merge, Ethereum’s execution layer processes transactions and smart contract logic as before. However, its consensus layer now relies on validators to order blocks and finalize transactions. User activities such as transferring ETH or deploying contracts remain unchanged.

Staking is now one way to participate. By locking ETH into the protocol, users can qualify as validators and potentially earn rewards. Individuals may run their own validator nodes or participate through third-party platforms or staking pools, following protocol-defined rules.

What Are the Practical Impacts of the Merge?

The most immediate impact of The Merge is a dramatic reduction in Ethereum’s energy consumption. According to estimates from the Ethereum Foundation, post-Merge energy use dropped by approximately 99.95% (source: Ethereum Foundation, 2022). This makes Ethereum more environmentally friendly and aligns with global compliance standards.

Regarding issuance and inflation, The Merge ended miner rewards, making net issuance more predictable. Combined with the base fee burn mechanism introduced in EIP-1559, periods of high on-chain activity can even result in low or near-zero inflation rates for ETH. As of December 2025, staking participation has continued to grow, and network security is increasingly decentralized among a broader set of validators (see long-term trends on Ethereum.org).

How Can You Participate in Staking After the Merge?

There are several steps for beginners looking to get involved in staking:

• Step 1: Prepare ETH and understand staking lock-up periods and variable returns. Staking involves entrusting your ETH to the protocol; returns fluctuate with network conditions.
• Step 2: Choose your method. Running a validator node requires technical skill and a reliable online setup. Alternatively, you can stake through platforms or pools. On Gate’s financial products section, users can select Ethereum staking solutions and review annual yields, fees, and rules.
• Step 3: Review terms and risk controls. Check if withdrawals are supported, whether there are early exit fees or slashing risks, and always maintain sufficient liquidity for emergencies.
• Step 4: Monitor continuously. Regularly track your staking performance and platform announcements. Stay informed about protocol upgrades or rule changes so you can adjust your holdings accordingly.

What Is the Relationship Between the Merge, Scalability, and Transaction Fees?

The Merge itself does not directly reduce mainnet transaction fees or equate to “completed scalability.” Instead, it enables the network to run in a more energy-efficient and sustainable manner—laying technical groundwork for future scaling solutions.

Scalability primarily relies on “layer 2” networks and upcoming features like sharding or data expansion. Layer 2 solutions process transactions off-chain before submitting results to Ethereum mainnet. In 2024, data expansion proposals (such as EIP-4844) will further reduce data costs on layer 2, making transactions even cheaper for users. Together with The Merge, these efforts form Ethereum’s long-term scaling roadmap.

What Are the Risks and Misconceptions Around the Merge?

A common misconception is that The Merge would instantly lower transaction fees; in reality, fees remain dependent on block space demand. True fee reduction requires additional scaling efforts via layer 2 networks.

Staking risks include ETH price volatility, reduced liquidity due to lock-up periods, slashing penalties for validator misbehavior or downtime, and operational or compliance risks associated with platforms or pools. Always review terms thoroughly before committing funds.

Key Takeaways on the Merge

The Merge describes Ethereum’s transition in 2022 from a mining-based proof-of-work model to a staking-based proof-of-stake model. The upgrade resulted in significantly lower energy usage, changes in ETH issuance structure, more open participation opportunities, and set the stage for future scaling improvements. Transaction fees do not automatically drop post-Merge; substantial user experience enhancements depend on layer 2 solutions and ongoing protocol upgrades. For most users, the recommended approach is to understand staking and validator roles, choose reliable platforms or solutions, and follow network developments over time while managing risks.

FAQ

How much ETH do you need to stake as a validator after The Merge?

To become an active validator on the Beacon Chain, you must stake 32 ETH. This ETH is locked in a smart contract to help secure the network. If a validator acts dishonestly or goes offline, part of their staked ETH may be slashed as a penalty—this mechanism ensures network integrity.

Will holding ETH change for regular users after The Merge?

ETH holdings remain unchanged for regular users; you can still transfer and trade as usual. The main difference is that behind the scenes, consensus mechanism switched from proof-of-work to proof-of-stake. This means faster transaction confirmations and about 99.95% lower network energy consumption. No action is required from holders—the system upgraded automatically.

Did Ethereum transaction speeds really improve after The Merge?

The Merge mainly optimized the consensus layer rather than execution speed; direct transaction throughput gains were limited. However, block times dropped from 15 seconds to 12 seconds for more consistent confirmations. Major scaling improvements require layer 2 solutions (such as Arbitrum or Optimism), which can boost throughput to thousands of transactions per second.

How can I stake Ethereum using Gate?

Gate offers multiple staking options for different needs. If you have 32 ETH, you can run your own validator node directly. With less than 32 ETH or if you prefer not to manage nodes yourself, you can use liquid staking products on Gate—this lets you earn staking rewards while keeping your funds liquid. Gate handles technical operations so beginners can participate easily; typical annual yields are around 3–4%.

Did The Merge make Ethereum more secure?

Security has improved in certain aspects post-Merge. In proof-of-stake, an attacker would need to control 51% of all staked ETH to compromise the network—an extremely costly and traceable attack vector. It also reduces risks associated with miner centralization. However, switching consensus mechanisms introduces new risks such as potential validator client centralization; ongoing vigilance is needed to mitigate these issues.