Ethereum Development 55% Complete After Merge: Vitalik Buterin

Key Insights:

• The Ethereum co-founder said there was still a lot of development work to do.
• The network will process 100,000 transactions per second when complete.
• Major scaling upgrades and monetary policy changes are in the roadmap.

Speaking at the annual Ethereum Community Conference (EthCC) in Paris on July 21, Ethereum co-founder Vitalik Buterin talked about the network’s long-term future.

The highly-anticipated Merge was a hot topic with just two months until Ethereum (ETH) transitions from energy-intensive proof-of-work mining to proof-of-stake consensus.

“After the merge, you will be able to build an Ethereum client that does not even know the proof-of-work phase even happened,” Buterin told a developer-oriented audience.

He added that developers had much more work ahead as the overall network will be “55% complete once we finish the Merge.” The Merge, which docks the existing Ethereum chain with the new Beacon Chain, has been slated for September 19, though delays are possible.

Massive Ethereum Scaling Planned

One of the biggest complaints about Ethereum is the transaction fees which skyrocket when the network is under heavy load. The Merge will not solve this issue as it is a consensus shift, so transaction fees will still fluctuate and be expensive when demand for block space peaks.

Upgrades planned for next year will address this issue as the network scales. Buterin said that “at the end of this road map, Ethereum will be a much more scalable system,” adding that it “will be able to process 100,000 transactions per second” by the end. Currently, the network can only manage 15-20 transactions per second which is not practical for widespread adoption.

Buterin mentioned more upgrades rhyming with the current one called “surge,” “verge,” “purge,” and “splurge.” These are part of the network’s scaling evolution and a cleanup phase, which are expected to be rolled out in the coming years.

He added that there would be deep changes, including updates to Ethereum monetary policy, token issuance, and security model. Currently, Ethereum is still being issued at a rate of around 5.5 million ETH per year. Once the Merge happens, the transaction fee burning process introduced with the EIP-1559 upgrade last year will make issuance deflationary so that the supply will decrease over time.

Since the upgrade was launched in August 2021, more than 2.5 million ETH have been burnt or destroyed. At current prices, this is worth around $4 billion.

Merge Momentum Continues

These monetary properties (which are the complete opposite of inflationary fiat currencies) are continuing to drive momentum for asset prices. ETH has made 33% over the past week as Merge anticipation grows.

At the time of writing, ETH was trading up 2.5% on the day at $1,578, following a monthly gain of 40%. It is leading the current crypto market rally, but things could turn south very quickly on recession concerns and macroeconomic news out of the U.S. next week.