Despite confirmation of zero downtime from Ethereum developers, FTX chose to suspend “deposits and withdrawals until the Merge is finished and networks are stable.”
While Ethereum devs promised no downtime during The Merge, one of the most anticipated Ethereum upgrades, members of the crypto community decided to take proactive measures to ensure the safety of investor funds. In this effort, crypto exchange FTX announced to halt all Ether (ETH) trades on various blockchains until the September upgrade concludes.
The Merge upgrade will permanently transition the Ethereum blockchain from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism — aimed at reducing energy consumption and introducing sharding capabilities.
According to Ethereum developers, the Merge is designed to transition to PoS with zero downtime owing to the terminal total difficulty (TTD), which will ensure the transition based on the total mining power that goes into building a chain. Despite the explanation, FTX chose to suspend “deposits and withdrawals until the Merge is finished and networks are stable.”
As the ETH merge approaches, FTX will temporarily disable blockchain transfers of secondary chains for ETH to make sure that settlement is clean; main chain ETH transfers will stay active for longer.— FTX (@FTX_Official) September 5, 2022
The trade suspension for Ethereum on various blockchains has been assigned to commence at different times but remains subject to change based on anticipated complications.FTX's official timelines for halting ETH trades. Source: FTX
FTX also pointed out that the crypto exchange is not liable for any losses in case of large price fluctuations, adding that “It is your responsibility to understand the implications of this announcement.”
Clarifying one of the biggest misconceptions tied to The Merge, Ethereum Foundation clarified that the upcoming upgrade will not reduce gas fees. The official statement reads:
"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."
Instead, the upgrade aims to purely eliminate the need for energy-intensive mining.