Ethereum merge is near, this fundamental update will bring Ethereum from Proof Of Work (mining) consensus algorithm to Proof Of Stake. Thanks to this update, Eth inflation will drop by about 90% (equal to a triple Halving of Bitcoin). Obviously, Eth will no longer be issued through mining but only through staking rewards. Through this article I will try to answer some known questions.

WHAT SHOULD ETHEREUM HOLDERS DO?
The update will be automatic, possibly without any blocking of the chain and users will not have to do anything. Updates will only take place on validator clients and exchanges. The official date, after the last tests on the Goerli Testnet (11 August), will be 19 September (possible delays apart).

WILL THE GAS FEE BE LOWERED?
Merge will not reduce gas fees and will not improve speed. The fees and transactions per second will remain the same therefore the scalability will remain the same. This feature will be improved with the implementation of sharding: that is the fragmentation of the blockchain (data will be distributed on each shard). Among the many positive features that will make Eth an increasingly valuable asset, the lowering of fees could have a negative impact on the price. According to Buterin, however, Eth will hold 100,000 TPS (transactions per second).

THE ROLE OF LAYER2: WILL ARBITRUM AND OPTMISM NEED STILL?
In the future, most of the network load (Defi) will be on the shoulders of the main layer2 (Arbitrum and Optimism), while on Ethereum the least burdensome operations will be performed (consensus and security on which layer2 rely). So layer2 will continue to be used a lot and at the same time, even when sharding is implemented, they will continue to be used because they will remain increasingly scalable than Ethereum. In this regard, Polygon has announced the launch of their version of zkEVM (a layer2 based on equivalent zk rollups EVM). Thanks to this, any dapp and smart contract will be easily transferable. Unlike Polygon which is a hybrid layer2 with its own consensus mechanism (Matic staking), in this case it is a pure layer2.

GOODBYE ENERGY CONSUMPTION
Another factor to take into consideration is that by abandoning Proof Of Work, Ethereum will no longer be energy-intensive. Where will the miners move to? Probably on Ethereum Classic (Etc).
The feature of the merge is that it will no longer be possible to mine but there will be validator nodes for staking (minimum 32 Eth to have a validator node that produces blocks and to receive staking rewards), there are no constraints for simple staking via full node (validation of transactions). You will not need high-performance hardware and in the same way the minimum quantity of 32 Eth makes the management of a node accessible to many (there should be tens of thousands of validators). There will be no on-chain governance but having so many Eth in staking you will obviously have a better chance to validate blocks.
Today the rewards for miners depend on mining and gas fees (minus the % that is burned), with the Proof Of Stake they will depend on staking and the aforementioned part of the gas fees (also in this case, subtracting the burns). The graphic below shows all the Ethereum burned in the last year (London update). Opensea, Uniswap, and Metamask are among the protocols that burn the most Eth.

ETH BLOCKED IN STAKING
The liquid derivatives (sETH, bETH, etc) deriving from Ethereum blocked in staking will not be immediately redeemable for ETH and will be available again after about 1 year from the merge. To avoid security problems, due to redemptions and possible sales, each validator can only redeem 43200 Eth for each era. As Ethereum in staking decreases, the APR increases (a bit like what happens for Atom) to incentivize staking. The gas fees distributed to the validator nodes will be immediately dumpable.

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