Coinbase, the largest cryptocurrency exchange in the US, will temporarily suspend Ethereum-based deposits and withdrawals during the September “merger” upgrade.
The exchange released a blog post on Tuesday explaining what to expect from Coinbase and Ethereum after the long-awaited network transformation.
Ensure a smooth transition
For Coinbase announcement, the suspension, which will have an impact on all ETH and ERC-20 on-chain token movements, serves to ensure that the update is adequately reflected within Coibase’s internal systems. No impacts are expected on trading of assets already on the stock exchange. From the perspective of users, the union should be “seamless”.
“We see this event as an important step towards large-scale adoption of the crypto economy and will support it in a variety of ways in line with our mission to increase economic freedom in the world,” the company said.
“The mergerIs the nickname of a highly anticipated Ethereum update that takes six years of work. It will move the protocol consensus mechanism from proof of work (POW) to proof of stake (POS), reducing its energy consumption by one projected 99.95%.
The transition also lays the groundwork for Ethereum’s scalability roadmap, which will help it address its high transaction cost issues. After completing the Goerli test public network merge last week, the merge should finally take place September 15.
Ahead of the event, Coinbase advised users to beware of merger-related scams, which could solicit user funds to “upgrade to ETH2”, even if there is no token associated with the upgrade. “Your assets will be safe during this time and no action is required for the upgrade on your part,” the exchange said.
Coinbase Cloud customers running the node infrastructure should experience 10 minutes of downtime for a routine upgrade leading up to the merge. Meanwhile, users of Coinbase’s wallet self-custody software “should have little or no impact” from the transition.
And what about staking ETH?
Coinbase said that all “ETH2” deposits currently staking with the platform will be listed in users’ “ETH” balance after the merger. However, the balances will still be presented separately as “ETH with staking” and are not expected to be available for withdrawal until early 2023.
Over 10% of all circulating ETH is currently locked as ETH in staking in the ETH 2.0 deposit agreement. According to Glass knotover 50% of these funds are managed by 4 staking providers including Coinbase, Binance, Kraken and Lido.
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