The Merge is Done! Now What?

Yesterday was a historic event for crypto, particularly Ethereum. The Merge, the long-awaited switchover from Proof of Work to Proof of Stake, went off without a hitch, and Ethereum is now running on 99.5% less energy and with a 90% lower inflation rate. If you’re curious about why the merge was a big deal, check out the last newsletter. 

The Ethereum community has been looking forward to the Merge since Ethereum’s launch in 2017. So now that it’s completed, it’s not unfair to wonder, “now what?” This was a major milestone in Ethereum’s development. However, it’s not done, and there are still some significant upgrades to come to turn it into the extensive, optimal blockchain the community imagines it can be. 

Most of those upgrades relate in some way to my central thesis for why blockchains are useful: building perpetual, decentralized applications that are widely available and inexpensive to use. If The Merge was the first big step in that direction, the next four steps (though these are being pursued in parallel, not in sequence) are called:

1. The Surge
2. The Verge
3. The Purge
4. The Splurge

The Merge was a big deal because it was focused on reducing Ethereum’s energy consumption and changing its consensus mechanism. But most of these next focuses contribute to massively scaling what the blockchain can accomplish now that it’s energy efficient. The Ethereum blockchain can currently process 15-20 transactions per second, and after these upgrades are complete, that number should be around 100,000 per second, including all the transactions on rollups. 

So how is Ethereum going to 5000x its capacity? Let’s walk through the four areas of upgrades to find out. 

I’ll also note that as a non-super-technical wordcel I’ve done my best to explain these concepts, but I will certainly come short in some regard given their complex nature. I’ve included further reading on each topic at the end of each section if you want to geek out.

The Surge