- Two other Ethereum testnets have successfully moved from PoW to PoS
- Staked rewards on Beacon Chain will remain locked until the Shanghai upgrade
Goerli, the third and final Ethereum testnet before the long-anticipated Merge, will likely switch to proof-of-stake within the next 24 hours.
The Merge is considered one of the most significant events in crypto history, as no blockchain with Ethereum’s level of influence and dominance has been through such a significant change.
Two prior testnets — Ropsten and Sepolia — have both successfully moved from a proof-of-work (PoW) to a proof-of-stake (PoS) system.
Vance Spencer, co-founder at Framework Ventures, told Blockworks that if the Goerli testnet was to successfully move to PoS, it’s likely the Ethereum mainnet Merge would occur in mid-September.
“There’s really expected to be no difficulties with this one [Goerli testnet],” Spencer said. “More than anything, they’re testing all of the current popular Ethereum testnets just out of an abundance of caution.”
Early Ethereum stakers months away from unlocking their crypto, at least
Staking is the process of locking cryptocurrency on a blockchain for a specific period to earn network rewards and contribute to the security of the network. Users who participate in staking are often called validators or stakers.
It’s important to note that even after the Merge, staked rewards generated thus far on the Beacon Chain will remain locked until the finalization of the Shanghai upgrade, planned to occur at least 6 to 12 months from now.
“The Shanghai upgrade is specifically designed to allow ETH withdrawals from the Beacon Chain,” Spencer said. “You will have the fluidity of being able to deposit and withdraw ethereum without having to wait.”
The Merge and Shanghai upgrade are very much the beginning of a longer roadmap for Ethereum, Spencer said.
After both complete, institutional investors may be more inclined to invest in the crypto space, according to Spencer.
“Everyone wants an asset with cashflows,” he said. “The Merge will make it possible to underwrite ether based on its cashflows and growth rates, and that’s a huge positive — frankly, it’s what the space needs to mature and get into its next phase.”