The Ethereum Merge — Tangany Update

What is The Merge, common misconceptions and what can our partners expect.

It’s finally happening. The long awaited Merge of the current Proof-of-Work (PoW) Ethereum Mainnet with the Proof-of-Stake (PoS) Beacon Chain is set to happen on September 15th 2022. Using the beacon chains PoS as the future consensus mechanism for producing new blocks, marks the end of PoW mining for Ethereum, as validators will check all transactions and propose new blocks.

The benefits of this merge will be an increase in network security and decentralization. Furthermore, Ethereums energy consumption will be reduced by around 99,95% according to the Ethereum Foundation. With the merge, the entire transaction history of Ethereum will remain intact and continue without any data loss. It lays the foundation for future scaling upgrades like sharding, which is coming in a future upgrade.

Source: https://ethereum.org/en/upgrades/merge/#preparing-for-the-merge

Common Misconceptions

There are many misconceptions around the merge. Some of the most common and significant misconceptions are addressed here.

Firstly, “The Merge will reduce Ethereum gas fees”. This is incorrect as only the consensus mechanism is changed. Network capacity will remain the same as before the merge, therefore gas fees will also remain the same.

Another misconception is that “Staked ETH can be withdrawn after the merge”. This is also false as staking withdrawals will not be enabled with the merge. Withdrawal of staked ETH will be possible after the Shanghai upgrade further down the road in ~Q1/Q2 2023.

Lastly, “The merge will lead to downtime of the Ethereum chain”. The merging process is completely automatic and will not lead to any downtime at all.

For more detailed information on misconceptions around The Merge visit the Ethereum Foundation site.

How is Tangany handling The Merge and what can partners expect?

API WALLETS

What’s the strategy with Tangany Custody API (Wallet as a Service)?

Due to the non-breaking nature of the Merge, all balances, contracts, and previous transactions will retain validity after the Merge. Thus no changes are planned regarding the API specification for the Merge. At the moment, we don’t expect any downtime for Ethereum Mainnet in the API. However, as the situation is still very fluid, we recommend avoiding high-value crypto and contract transfers (ERC20, NFTs, …) during the Merge.

As a cautionary measure, we will halt accepting transaction calls (`POST eth/wallet/:wallet/send-async` and `POST eth/contract/:contract/:wallet/send-async`) on the Ethereum Mainnet for about 1 hour before the Merge and a minimum of 3 hours afterward.

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Do you support the Ethereum Proof of Work (PoW) chain?

We have no plans to include any Ethereum PoW chains natively to the API or provide official node infrastructure for PoW chains. However, upon request, our support team is able to add custom Ethereum node RPCs to your workspace and enable API communication with EVM compatible chains of your choice.

Please note that adding a custom node RPC may take up to a business day. After the addition, you may use the chain via the API, albeit the previously mentioned restrictions for accepting transaction calls during the Merge will still apply.

Please note that in that case, Tangany cannot provide warranty related to losses due to protocol-based inconsistencies from the Merge.

Are there infrastructure changes for partners?

Ropsten and other Ethereum testnets are planned for deactivation in Q4 2022 in the Tangany Custody API (Wallet as a Service). After that, all data, contracts, and balances in Ropsten will be lost. Eventually, Ropsten will be removed as a natively supported network from the API.

We have decided to offer “Goerli” as the successor to Ropsten and recommend migrating as soon as possible as it will be the only supported Ethereum test network for the foreseeable future. Goerli will be rolled out as the new built-in Ethereum testnet in the Tangany Custody API with version 1.12, which is expected to be available around September 2022.

Please note that it is possible to use Goerli before the official rollout with Tangany Custody API 1.12 by specifying a custom node RPC upon a support request.

MANAGED WALLETS

What’s the strategy with Managed Wallets?

All requests will be routed to Ethereum Proof-of-Stake, so no changes are expected. In case there are multiple Proof-of-Stake chains, we will likely halt all transactions until the dominant and legitimate chain can be identified.

Do you support the Ethereum Proof of Work (PoW) chain?

As a couple of miners already signaled, there is a chance that the Ethereum Mainnet may commit one or multiple hard forks during the Merge. In such a case, we will evaluate the situation first and expect to provide support for the Ethereum PoW chain within a couple of days. We prioritize ensuring that the forked chains are safe to use and feature a safe hash rate. All assets will be allocated accordingly to our partners, clients, and customers without prior request.