Ethereum is about to execute its highly anticipated merge upgrade that will see more decentralized applications, “Dapps”, and thousands of non-fungible tokens (NFTs) shifting to more energy-intensive and low transaction consensus mechanisms in the next few days.
The highly anticipated Ethereum merge, which has been in development for decades and delayed for a year, has already attracted heated discussion within the crypto community, with many NFT holders impatient to know the fate of their NFTs post-merge.
The simple answer is nothing. However, we shall dive in-depth to discover what could happen and what to expect when the multi-million dollar NFT market reckons with some expected twists and turns after the Ethereum merge.
Ethereum Merge Explained
The long-awaited merge will see the Ethereum network shifting its current “proof-of-work” mining model, which requires ample decentralized power to process transactions, to a relatively lower energy “proof-of-stake” consensus mechanism.
According to Ethereum Foundation, the new consensus expects to lower energy utilization by more than 99%. The merge is a great milestone for Ethereum and especially for NFTs. It will effectively reverse one of the biggest criticisms of NFTs.
Moreover, the long-planned upgrade aims to improve the Ethereum network scalability and security. It will offset carbon emissions and significantly reduce the environmental impacts of the Ethereum network.
What Does Merge Means For NFTs?
Ethereum is one of the biggest marketplaces for non-fungible tokens (NFTs) and home to many popular digital collectibles such as Bored Ape Yacht Club (BAYC), Moonbirds, CryptoPunks and Doodles, among many others.
The long-awaited merge upgrade will see tens of millions of profile pictures, collectibles and pieces of digital artworks currently running on the Ethereum chain shifting to the new proof of stake consensus mechanism (PoS).
Ethereum developers anticipate that digital collectibles will function normally following the merge. However, they expect there may be more forked versions of Ethereum after the merge, which might potentially create confusion or lead to scams as duplicated NFT assets enter the new system.
Although there is no guarantee that everything will go to plan, Ethereum builders maintained that any momentum about duplicate NFTs on forked chains would be short-lived. Creators and major marketplaces won’t even recognize copies on such forked chains.
In a recent interview, Johnna Powell, NFT co-head at Ethereum-centric Software Company, ConsenSys, affirmed that users should expect their NFTs will safely reside on the new Ethereum chain along with their ETH tokens.
Merge Gains Adoption Ahead Of Its Launch
Ethereum merge has already gained adoption ahead of its anticipated launch mid-this month. The largest non-fungible token marketplace, OpenSea, declared its support earlier this week. “We are committed to supporting Ethereum merge solely.” OpenSea tweeted.
At the time, OpenSea announced that it wouldn’t support any other Ethereum forks after the merge, maintaining that it would only support the proof-of-chain chain. This move will help a significant chunk of collectors avoid confusion and scams around duped NFTs.
Yuga Labs, the creator of the Bored Ape Yacht Club and now the new owner of CryptoPunks IP has also declared support for the Ethereum merge. Two weeks ago, Yuga Labs announced that NFTs holders on the merge would get a chance for more benefits within the Yuga community.
Proof, the startup behind the members-only “Proof Collective” and valuable Moonbirds NFT project, has also expressed a similar stance about Ethereum merge. Proof has also maintained that it won’t support or recognize any fork made post-merge.
Nonetheless, few protocols have turned out to create a movement to resist the Ethereum merge transition. ETHPOW, a blockchain protocol created by Chinese miner, Chandler Guo, is a perfect example. Guo plans to fork blockchain that will continue using the proof of work consensus mechanism.
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