Coinbase has announced that it will temporarily halt ETH and ERC-20 token deposits and withdrawals during the Merge upgrade. Customers will be able to use the platform’s trading services during the transition of Ethereum’s consensus mechanism, but they will be unable to deposit or withdraw any ETH or ERC-20 tokens.
Coinbase to Pause ETH Transactions During Merge
In a blog post on Tuesday, Coinbase announced that it would “temporarily pause” ETH and ERC-20 token deposits and withdrawals during Ethereum’s transition to Proof-of-Stake, which is set to take place on September 15. The exchange indicated that the step was taken as a precaution.
Ethereum is set to switch away from its Proof-of-Work consensus mechanism in an eagerly anticipated event known in the crypto community as the “Merge.” Among other advantages, the Merge is expected to significantly reduce Ethereum’s energy consumption and lower the rate of ETH token emission by 90%.
According to Coinbase, the downtime will allow the exchange to ensure that the upgrade is seamlessly reflected in its systems. Coinbase users will be notified of the resumption of deposits and withdrawals via the exchange’s status page and official Twitter account. Trading services are not expected to be impacted.
The exchange stated that assuming the Merge was successful, Coinbase Wallet users would be unaffected by the operation since the wallet is self-custodied. In contrast, Coinbase Commerce customers will be temporarily unable to process new payments.
Following the Merge, Coinbase customers will see their staked ETH balance listed in their ETH wallet rather than under the ETH2 ticker. Staked and unstaked ETH balances will remain separate; the exchange noted that staked ETH will not be available for unstaking until early 2023.
As such, Tuesday’s announcement indicated the exchange’s full support for ETH’s transition to PoS. However, the update made no mention of potential support for ETH PoW hard fork tokens.
At the time of writing, it remains unclear whether crypto exchanges plan to back forked tokens from ETH’s PoW network. The news of a hard fork broke a few weeks ago when prominent Chinese ETH miner Chandler Guo announced plans to fork the current blockchain and preserve an ecosystem in which miners remain relevant.
While major cryptocurrency exchanges have not yet declared open support for this plan, Deribit and OKX have indicated they would list forked tokens if sufficient demand is generated.
Ethereum’s Move to PoS Set for Sept. 15
Following the completion of a successful Merge on the Goerli testnet, Ethereum is scheduled to implement its transition to a PoS network around September 15. The shift was previously scheduled for September 19, but this was a tentative date subject to change, as crypto.news reported.
Notably, the much-anticipated Merge includes two major upgrades dubbed Bellatrix and Paris. Bellatrix interacts with ETH’s Beacon Chain, which includes a PoS component, and puts the network in a “Merge aware” state.
Finally, Paris represents the complete transition. During the Paris upgrade, Ethereum’s mainnet will shift from the PoW consensus mechanism to the new PoS chain, which will power the ETH ecosystem for the foreseeable future.
Sourced from crypto.news.
Written by Rony Roy on 2022-08-17 12:00:00.
