Ethereum’s Shadow Fork Pushes Network Closer to the Merge and Raises ETH Price
Ethereum has launched its ninth fork in preparation for the network’s merge with the proof-of-stake Beacon Chain (and transition away from its current proof-of-work model). Ethereum’s network has been undergoing a series of test forks that copy the data from the main network to a test environment network.
Vitalik Buterin, the co-founder of Ethereum, has stated that the Merge will solve Ethereum’s long-standing sustainability issues and mitigate the risk of malicious miners manipulating the order of on-chain transactions. This successful shadow fork, which has yet to encounter any significant glitches, brings the network closer to those goals.
Ethereum core developer, Marius van der Wijden, stated that today’s test is “another step in the right direction.” van der Wijden continued: “We don’t learn that much new anymore with these shadow forks, but they increase our confidence in the software.”
This is the final test the network required prior to the Merge (the blockchain’s transition into proof-of-stake) which was highly anticipated, especially after multiple delays.
During this shadow fork, developers focused primarily on testing updates and the releases used in the recent Sepolia hard fork “but on a more intensive network.”
The New MEV Boost Feature
The shadow fork also tested Ethereum’s maximal extractable value (MEV) boost feature. MEV is the process that allows those who create new ETH to further profit by utilizing their control over the network and prioritizing certain users’ transactions.
Currently, ETH is created through mining with specialized hardware, but after the Merge, it will instead be earned by validating or pledging large quantities of pre-existing ETH.
Ethereum core developer Micah Zoltu spoke more on the new model: “With the change to proof of stake, validators will now be the ones executing MEV, so searchers will need to get their bundles to validators now (rather than miners). MEV Boost is basically that.”
The MEV boost feature allows validators to offer space within blocks they create to other validators. This mechanism encourages competition between validators, increasing validating profits across the board and diluting the risk of validators accumulating too much leverage over orders or user transactions.
The new proof-of-stake method the network will employ is estimated to be 99% more environmentally friendly than the current, energy-intensive proof-of-work model, according to the Ethereum Foundation. However, the new model will also provide lower profits for the individuals involved.
Due to the drastic shift of the model, the Merge transition to proof-of-stake will more than likely leave thousands of Ethereum miners unable to match the profit model of Ethereum mining post-Merge. Miners will also be left with incredibly costly mining hardware that will no longer be compatible with the new model.
The ETH token rallied over 11% in just a few hours following the shadow fork. The token was trading at $1,077 early Friday morning and jumped to $1,213 at around 7:50 am the same morning, rising 11.877%.
The network will undergo one final major text on the Goerli testnet. Following the completion of this text, the Merge is ready to take place. That test is expected to occur next month.
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Writer, content marketing at Netcoins.