The cryptocurrency trading platform will stop processing ETH transactions on auxiliary blockchains until the September upgrade is finished, according to a statement from FTX.
The Merge, one of the most anticipated Ethereum updates, was supposed to have zero downtime, but members of the cryptocurrency community made the decision to take preventative action to guarantee the security of investor funds. FTX, a cryptocurrency exchange, declared that it would stop processing Ether transactions on secondary blockchains until the September update is finished.
The original story’s source tweet has been removed by FTX, and the initial blog post has been modified. The post was quickly removed by FTX while CEO Sam Bankman-Fried confirmed that “ETH trading will stay on through Merge” shortly after the announcement.
This blog post has been updated in light of fresh official data to confirm that FTX will only prohibit ETH deposits and withdrawals, not cryptocurrency exchange trades.
The Merge upgrade aims to save energy and add sharding capabilities by permanently switching the Ethereum blockchain from a proof-of-work (PoW) consensus method to a proof-of-stake (PoS) consensus mechanism.
The terminal total difficulty (TTD), which ensures the transition based on the total mining power that goes into generating a chain, is how Ethereum developers claim the Merge is planned to switch to PoS with zero downtime. FTX decided to halt “deposits and withdrawals until the Merge is finished and networks are stable” despite the explanation.
The suspension of Ethereum deposits and withdrawals across different blockchains has been scheduled to start at various points but is still subject to change based on potential issues.
FTX added that “It is your responsibility to understand the implications of this announcement” and emphasized that the cryptocurrency exchange is not responsible for any losses that may result from significant price swings.
The Ethereum Foundation clarified that the impending upgrade will not lower gas fees, dispelling one of the major myths surrounding The Merge. According to the official statement:
“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput.”
The upgrade’s sole goal is to do away with the necessity for energy-intensive mining.