Binance Exchange has stated that it will be putting all transactions on Ethereum and ERC-20 Network on hold during the merge to shift its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The suspension of activities on the network is scheduled to happen on September 6 and September 15, respectively, during the Bellatrix remodeling and the Paris upgrade.
After Coinbase declared its plan to withhold all deposits and withdrawals on Ethereum Network, Binance made the following announcement. Both platforms seek to safeguard their customers and investors from the possible volatility that might occur in the middle of the upgrade. So, to prevent their customers from losing their funds, they have considered this method best to keep the situation under control.
Binance Gives Conditions to Reopen Transaction Early
Binance notes two instances that may cause it to shut down ERC-20 transactions for a longer term. The first is due to the potential event of a hard fork. If a new token gets created during the merge, the exchange would have to take time to assess the quality of the new asset before listing it among existing trading assets. But if no new token gets birthed, it will immediately resume buying and selling Ethereum and other cryptocurrencies operating on its blockchain.
Secondly, the occurrence of a new token getting created means the blockchain will get divided into two separate chains. Hence, the exchange will have to initiate the compensation of ETH holders with the new token on a 1:1 estimate depending on each person’s balance before the snapshot before the Paris remodeling.
Binance will prop trading the forked token and reveal information regarding when the listing of the forked token will be in coming announcements.
Furthermore, the exchange indicates that spot trading on ERC-20 Network and ETH will not pause during the transition. However, investors should be careful to avoid getting trapped by the market. The merge will not impact ETH cross and Isolated margin pairs but will quit marginal lending and borrowing.
Also, futures pairs on both USD-M and Coin-M will continue running. However, the exchange will adopt methods to protect traders through adjusted margins.
After the merge, ETH miners on the PoW consensus mechanism can transfer their hash rate to the ETH Classic Binance pool.
Stages of The Merge
The first stage features the Bellatrix upgrade. During this stage, the Beacon Chain will be prepared for the layer’s amalgamation. The time is set for 11:34:47 UTC, an equivalent of epoch 144896 Ethereum time on September 6.
Following the Bellatrix upgrade is the Paris upgrade that will finally activate the merger. But before then, the Total Terminal Difficulty must be at 58,750,000,000,000,000,000,000. Soon as the TTD gets reached or crossed, a succeeding Proof-of-Stake will get created.
Reaching Total Terminal Difficulty is predicted to occur between the 10th and 20th of September.