Eliminating carbon footprint, Ethereum merges four pillars to restore ecological confidence

The Merge with Proof of Stake (PoS) will be the most profound upgrade to Ethereum to date, second only to the genesis block in importance. It will be an example for the world to see how a major, decentralized system can practically eliminate its carbon footprint.

Recently, Ethereum infrastructure development company ConsenSys tweeted that the Ethereum merger will completely change the way Ethereum is built and accessed, and the merger will bring four pillars to the development of Ethereum.

ConsenSys has played a fundamental role in the continued development of the Ethereum protocol since its founding in 2015. From day one of planning for “Eth2,” the ConsenSys protocol engineering team has been working tirelessly to achieve the merger:

(Main contribution from ConsenSys Protocol Team)

The ConsenSys team pointed out that we believe that decentralized networks like Ethereum can help society achieve more, and we have contributed our people, products, and resources to bring PoS to Ethereum. As the merger approaches, we hope to restore confidence in the ecosystem by explaining how Ethereum will be upgraded. These are the four pillars of the merger.

Pillar 1: Diversification and Openness

Proof of Stake will democratize network participation and distribute rewards more fairly through new incentives, validators, and innovations.

New incentives are designed to encourage more participation from single-node validators while holding larger players accountable. An example of this is the anti-correlation mechanism, which imposes smaller penalties on single-node validators versus large stakers like Coinbase or Lido that operate thousands of nodes. Anti-correlation mechanisms enforce the principle of “with great power comes great responsibility”, encouraging large players to align with network goals like customer diversity.

Upgrading to PoS will make Ethereum more open and diverse. Diversity in clients, validators, and second layers will also ensure a healthy, scalable network that democratizes participation.

PoS not only has lower resource requirements for validating nodes, but is also designed to reward all participants, not just those with the most computing power. While there will still be network participants with more nodes and whales, every node will have an equal chance of receiving rewards.

It’s also important to remember that while PoS will help make Ethereum more diverse by bringing in new participants, validators still have a responsibility to help promote client diversity by choosing a diverse selection of software clients. ConsenSys offers free and open source Ethereum client software, such as Besu and Teku, as we strive for an even distribution of clients outside of our own.

New innovations like staking pools lower the barrier to participation and allow multiple parties to pool their ETH to meet the minimum staking threshold of 32 ETH. ConsenSys is one of 14 organizations in the Rocket Pool DAO supporting fully decentralized staking pools.

Pillar 2. Energy efficiency

Evolving the network’s consensus method ensures that Ethereum can sustainably support the next generation of Web3 creators and developers without harming the planet.

PoS will reduce the energy used by each transaction by 99.95%, roughly equivalent to the energy consumption of the Netherlands. Ethereum exists to improve the world, not to harm it.

The PoS upgrade also makes Ethereum more modular. This modularity separates computationally intensive execution from the consensus layer, which is one of the reasons for reducing the energy consumption of network operation.

L2 rollup and other efficiencies of sharding will reduce the energy consumed by Ethereum by orders of magnitude.

The PoS upgrade also makes Ethereum more modular. This modularity separates computationally intensive execution from the consensus layer, which is one of the reasons for reducing the energy consumption of network operation.

Pillar 3. Seamless Transition

Developers working on Ethereum can rest easy knowing that a common API for merging pre- and post-architectures and reuse of existing components (such as Ethereum execution clients Besu and Geth) will ensure an uninterrupted developer experience with a seamless transition. This means little to no rework for existing applications, but we recommend testing to be fully confident.

The similarity of the PoW and PoS interfaces means that no API changes are required. The Engine API is compatible with existing infrastructure and developer tools from the beginning. Leveraging existing components also ensures that there is no need to rewrite smart contracts or dapps or migrate infrastructure. For dapps that rely on random opcodes, some infrastructure updates may be required. If you are an Ethereum developer and want to start testing your dapps and infrastructure in advance, we encourage you to do so using the recently launched Kiln testnet.

The increased client choice and flexibility will allow developers to mix and match to suit their needs, such as using a lightweight client at the execution layer and a heavyweight staking client at the consensus layer.

Migrating to PoS also means more predictable block times and fees, which will reduce uncertainty when designing high-traffic solutions that block on a 12-second heartbeat cycle and use EIP-1559 to establish baseline fees.

Pillar 4. Super Sound Money

The merger will bring about a newer cryptoeconomic model, reduce the issuance of Ether, and provide stronger security for end users and the DeFi industry. The merger will also limit the supply of Ethereum, making it more scarce and therefore more valuable.

Network economics are inherently dynamic, but it’s worth noting a few potential outcomes coupled with the move to PoS: a reduction in the number of tokens created to pay validators (a 90% reduction), and the destruction of tokens collected as transaction fees instead of passing them on to miners.

The cost of attacking the chain will also increase significantly (10-20x). Democratized participation ensures that it is almost impossible to attack. At the current level of 350K validators (10M ETH staked), the cost of attacking the chain is 51% of $34B. The deflationary impact of PoS with EIP-1559, and the expected increase in staked ETH after the merger, will exacerbate this attack cost.

More importantly, the attack will become easier to recover from, in part because the slashing will destroy the stake used for the attack, requiring further investment to sustain the attack. A soft fork activated by a minority of users could also be coordinated by the community to destroy the attacker's coins.

Merger is coming

We hope these four pillars have clarified how Ethereum will upgrade by migrating to PoS and restored your confidence:

1. Openness and diversity: Ethereum can be more easily accessed by all types of participants, leading to greater decentralization.

2. Energy saving: The required computing power is reduced by several orders of magnitude, reducing the carbon footprint of each Ethereum transaction by 99.95%.

3. Seamless transition: Builders currently working on the network will not be interrupted, continue to build, continue to deliver, and test at full capacity.

4. Super-sound money: The updated cryptoeconomic model makes Ether more secure, scarce, and improves the finality of transactions.

ConsenSys believes that decentralized networks like Ethereum make society more prosperous by connecting us more deeply and removing centers of power and their inherent shortcomings. We will continue to contribute our people, products, and resources to complete the merger.

Additionally, for regular updates and news about Merge, visit the ConsenSys Merge Knowledge Base, where you will also find the Merge Archives with key milestones achieved and other great resources for developers.