The assumption that Ethereum will simply transition to a fully functional proof-of-stake (PoS) network after the merger somewhat ignores the risk and effort required to move an asset with a market cap of $193 billion and 400 decentralized applications (DApps).
That’s exactly why monitoring vital network conditions is essential for anyone willing to trade the event scheduled for Sept. 14, according to ethernodes.org. More importantly, traders should be prepared to detect alarming developments in case something goes wrong.
Aside from the total worth of $34.2 billion in smart contracts, another $5.3 billion in Ether has been staked on the Beacon Chain. The network is currently used by many tokens, oracle providers, stablecoins, layer-2 scalability solutions, synthetic assets, non-replaceable items (NFT), decentralized financial (DeFi) applications, and cross-chain bridges.
This partly explains why the Merge has been delayed several times over the years and why it is considered the most significant upgrade in the network’s history.
For this reason, three different testnets underwent the Merge, with Goerli being the last on August 11. Strangely, minor issues were presented on all testnet implementations, including Ropsten and Sepolia. For example, Ethereum developer Marius van der Wijden noted that “two different terminal blocks and many unupdated nodes” slowed down the process somewhat.
The core of any blockchain network are the blocks
It doesn’t matter what the consensus mechanism is. All blockchains depend on new blocks being proposed and validated. There are set block parameters that must be followed, even to be considered by the network participants.
In the case of the Ethereum Merge, an epoch is a bundle of up to 32 blocks that must be confirmed within six and a half minutes. Actively monitoring the ETH2 Beacon Chain Mainnet from reputable sources such as Etherscan’s BeaconScan and Redot’s Ethscan ETH2 Explorer is important.
Red flags on this monitor would be low voting participation on the eras, the lack of finality after thirteen minutes (2 eras) or a cessation of the proposed blocks.
Monitoring Infura’s Ethereum 2.0 API
Infura provides infrastructure for building decentralized applications, allowing developers to deploy their solutions without hosting their own entire Ethereum node. The company is wholly owned by Ethereum venture capital group ConsenSys, which is controlled by Joseph Lubin.
According to Infura’s website, projects that rely on its infrastructure include Uniswap, Compound, Maker, Gnosis, Brave, Decentraland, and Web3 wallet provider Metamask.
So monitoring Infura’s API is a good starting point to evaluate the performance of Dapps. In addition, their status page should reliably display real-time updates, taking into account how closely Infura interacts with the Ethereum ecosystem.
Related: ETH Merge, CoinGecko Co-Founder Shares Forked Token Strategy
Slashings, are validators penalized?
The Ethereum Merge consensus mechanism has built-in penalty rules designed to prevent attacks. Any validator who intentionally misbehaves will be shortened, meaning a portion of his respective 32 Ether stake will be removed. Repeated slashes will eventually cause the validator to be removed from the network. Staking providers and the validator software have built-in security to prevent someone from being cut accidentally, for example if their connection goes down.
Traders should understand that slashing is a default action of the network, a protective measure, so it should not be immediately considered unfavorable. A worrying environment would be hundreds of validators being clipped at the same time, possibly indicating their software is not functioning properly.
There are over 410,000 active validators, so even if 20% or 30% of them eventually went offline, the network would continue as designed. Slashing monitoring is a preventative measure because it likely indicates that a particular service, such as a hosting provider, has gone offline or an incompatibility occurred during the merge.
Proponents of Ethereum should consider monitoring external data rather than just their own node and server. There may be delays or even false warning signs, so using multiple sources of information can help you avoid being misled by data from a single website or social network posting.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN. Every investment and trading move involves risks. You should do your own research when making a decision.