How will the PoS transition impact the ETH ecosystem?

The Ethereum blockchain is on the verge of one of the most crucial technical updates since its inception, moving from proof-of-work (PoW) to proof-of-stake (PoS), also called Ethereum 2.0, or Eth2. 

Ethereum devs gave Sept. 19 as the perpetual date for the merger of the current PoW chain to the PoS chain. The Merge is expected to be deployed on the Goerli testnet in the second week of August. After the successful integration of the Goerli testnet, the blockchain will initiate the Bellatrix update in early August and roll out the Merge two weeks later.

The discussion around the transition began with a focus on scalability, so Ethereum developers proposed a three-phase transformation process. The transition itself is nearly two years in the making, starting on December 1, 2020, with the launch of Beacon Chain, initiating Phase 0 of the three-phase process.

The Beacon Chain began the shift to PoS, enabling users to stake their Ether (ETH) and become validators. However, Phase 0 did not affect the main Ethereum blockchain: The Beacon Chain exists alongside Ethereum’s mainnet. However, both the Beacon chain and mainnet will eventually be linked with the Merge.

Phase 1 was meant to launch in mid-2021 but was delayed to early 2022, with developers citing unfinished work and code auditing as major reasons. From Phase 1 onward, Eth2 will house Ethereum’s entire history of transactions and support smart contracts on the PoS network. Stakers and validators will officially step into action, as Eth2 will take mining out of the network.

Phase 2, the final phase of the transition, will see the introduction of Ethereum WebAssembly, or eWASM, over the current Ethereum Virtual Machine (EVM). WebAssembly was created by the World Wide Web Consortium and is designed to make Ethereum significantly more efficient than it currently stands. Ethereum WebAssembly is a proposed deterministic subset of WebAssembly for the Ethereum smart contract execution layer. The eWASM was specifically designed to replace the EVM, which would see implementation in Phase 2.

Marius Ciubotariu, co-founder of Hubble Protocol — a decentralized finance (DeFi) lending platform — told Cointelegraph that he is not really worried about the delays, as any new technology with such vast implications on the ecosystem would take time:

“PoS is not live yet; however, I do not see this as a concern. I understand the Merge has taken longer than some would expect. But, with new technology and the opportunity…