What the Ethereum Merge means for layer-2 solutions on the blockchain

9 Nov 2022

Ethereum is just over a week away from officially moving to a proof-of-stake (PoS) blockchain with the Merge slated for completion around Sept. 13–15. With the transition, Ethereum will abandon its current proof-of-work (PoW) chain, eliminating miners from the ecosystem. 
Ethereum is a vast ecosystem with thousands of decentralized applications and decentralized finance protocols working on top of it. Additionally, there are several layer-2 solutions — i.e., solutions built on top of the blockchain itself, the layer 1 — to facilitate faster transactions and make Ethereum more scalable.

The Merge will mark the completion of the second phase of the three-phase transition process. The upcoming event will only see the official change of consensus, where the Ethereum blockchain will start processing transactions on the PoS chain. However, there won’t be much impact on scalability or gas fees.
The third phase, which will add sharding, a type of parallel processing that Ethereum founders and engineers have promised could exponentially boost Ethereum's transaction throughput, is where the scalability adjustments are expected to appear.
After the Merge, will layer-2 technologies like Polygon, Arbitrum One, Boba Network, and Loopering still be functional? For information on how the Merge will affect these L2 ecosystems, Cointelegraph spoke with industry insiders. Paolo Ardoino, chief technology officer of Bitfinex, thinks the Merge won't have any effect on L2s because it won't quickly address the scalability issues. According to him, L2s will continue to have a place in the Ethereum ecosystem even after the third phase of the transition is complete and it becomes massively scalable.

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