What did the Merge change? Ethereum's proof-of-work to proof-of-stake switch, explained

On September 15, 2022, the Merge switched Ethereum from mining to staking. It changed how the network agrees on transactions, cut energy use by about 99.95 percent, and slashed how much new ETH gets created. It did not lower gas fees, speed up transactions, or change the ETH in your wallet.

What was the Ethereum Merge, and when did it happen?

The Merge happened on September 15, 2022. It switched Ethereum's consensus, the way the network agrees on which transactions are real, from proof-of-work to proof-of-stake. It did this by joining two pieces that already existed: the original mainnet and a newer chain built for staking. After the Merge, mining ended for good.

Let us unpack the names, because they matter. Proof-of-work was Ethereum's old system. In it, computers called miners raced to solve hard puzzles, burning a lot of electricity, and the winner got to add the next block of transactions. Proof-of-stake is the new system. In it, people called validators lock up their own ETH as a deposit, and the network picks them to add blocks. The deposit, money at risk, is what keeps them honest.

The Merge joined two layers. The first is the execution layer, which is the mainnet that has run since 2015. It holds your accounts, your balances, and the apps built on Ethereum. The second is the beacon chain, which is the proof-of-stake consensus layer that launched on December 1, 2020. The beacon chain ran quietly in parallel for almost two years, testing staking, before the Merge plugged it in as Ethereum's new engine (source: Ethereum: The Merge).

Here is a simple way to picture it. Imagine a plane flying with its old engine. Engineers build a cleaner engine on the ground, test it for months, then swap it in while the plane stays in the air. The plane never lands. The passengers feel nothing. That is what the Merge did to Ethereum. The chain kept running, every past transaction stayed intact, and the only thing that changed was the engine securing it.

Why did Ethereum switch from mining to staking?

Ethereum switched to use far less energy and to set up future upgrades. Mining secured the chain by spending electricity, which was costly and dirty. Staking secures it by putting money at risk instead. The switch ended Ethereum's huge power use and cleared the way for the scaling work that came later.

Think of it as two ways to guard a vault. With mining, you pay guards by the hour to keep working harder and harder, and the electricity bill never stops. With staking, each guard posts a large cash bond before starting. If a guard helps a thief, they lose the bond. You no longer need to pay for endless effort. The money on the line does the work, because cheating costs more than it could ever pay.

That shift is the whole point. Proof-of-work tied security to raw energy spent. Proof-of-stake ties security to staked ETH that an attacker would lose if they misbehaved. Same goal, keeping the chain honest, but a far cheaper and cleaner method.

We will not unpack the full mining-versus-staking debate here. For a side-by-side look at the two systems, see our guide on proof of work versus proof of stake. It is also worth knowing that not every network made this switch. Bitcoin still runs on mining, and the differences between the two networks are covered in Bitcoin versus Ethereum. The deeper mechanics of how Ethereum staking works, including validators and finality, live in our companion guide on Ethereum proof-of-stake.

Was the Merge risky, and how was it tested?

The Merge was a major change, but it was rehearsed for almost two years before it touched real funds. The beacon chain ran proof-of-stake in parallel from December 2020, and developers practiced the switch over and over on test networks first. By the time mainnet merged, the process was well-tested, and it went through with no loss of user funds.

Swapping a live blockchain's engine while billions of dollars sit on it is not something you do on the first try. So Ethereum's developers ran the Merge repeatedly on public test networks, such as Goerli and Sepolia, and on practice copies of the real network called shadow forks. Each rehearsal surfaced bugs and timing problems that could be fixed long before they ever reached mainnet.

When the Merge finally happened on mainnet, it went through cleanly. No user funds were lost, the chain did not halt, and most people noticed nothing at all. For a change this large, a quiet and uneventful switch was exactly the goal. That long, careful rehearsal is a big part of why the Merge is now seen as one of the smoothest major upgrades crypto has done.

What did the Merge actually change?

The Merge changed three real things. It changed consensus, swapping mining for staking. It changed energy use, cutting it by about 99.95 percent. And it changed issuance, the rate at which new ETH is created, dropping it by roughly 88 to 90 percent because mining rewards ended. Everything else about using Ethereum stayed the same.

Let us define issuance plainly. Issuance is simply the creation of new ETH that did not exist before. Before the Merge, new ETH came from two places. Miners received about 13,000 ETH per day for their work. Stakers received roughly 1,600 to 1,700 ETH per day. After the Merge, the miner share vanished completely, and only the staking share remained. That is why total new ETH fell so sharply (source: Ethereum: How the Merge impacted ETH supply).

The energy drop is the headline most people remember. By ending mining, Ethereum stopped running rooms full of power-hungry machines around the clock. Its energy use fell by about 99.95 percent, which turned a very heavy network into a light one almost overnight (source: CCN).

Here is a clear before-and-after view of what the Merge touched:

Notice what the right two columns show. The big numbers changed, but the rows for gas fees and speed did not. That gap is exactly where most of the confusion about the Merge comes from. The depth of how ETH supply and inflation work is its own topic, covered in our guide on ETH tokenomics.

What did the Merge NOT change?

This is the part most people get wrong. The Merge did not lower gas fees. It did not make transactions faster. It did not change your ETH, your wallet address, or how you use Ethereum at all. It was a change to the engine underneath, not to the price of a ride or the speed of the trip.

Start with gas fees, because this is the number one myth. Gas fees are what you pay to use Ethereum, and they rise and fall with how busy the network is. The Merge was a change of consensus mechanism, not an expansion of network capacity, so it was never meant to lower fees. The Ethereum Foundation said this plainly before the Merge even happened (source: Cointelegraph). Fees depend on demand versus capacity, and the Merge did not change the capacity.

Next, transaction speed. The Merge did not make Ethereum faster in any way a normal user would notice. Blocks arrive on a slightly different rhythm now, but the throughput, how many transactions the chain can handle, stayed essentially the same. If you expected the Merge to make your transfers zip through, that was never on the table.

Finally, your ETH and your everyday experience. Your ETH is the same ETH it always was. There is no "old ETH" or "new ETH", and your wallet works exactly as before. Your tokens, NFTs, and any DeFi positions carried over untouched as well. You did not need to move funds, upgrade anything, or take any action. A small group of miners did start a separate proof-of-work chain with its own token, sometimes called ETHW, so they could keep mining, but that is a different network and a different coin, not the ETH on Ethereum. Anyone who told you to move or swap your ETH for the Merge was likely trying to scam you.

It did not create a new coin or a separate "Ethereum 2.0". You may still see the name "Eth2" or "Ethereum 2.0". That label was officially dropped in early 2022, because it gave beginners the wrong idea that the old Ethereum would be thrown away and replaced by a new one (source: The great renaming). There is just one Ethereum. The Merge split its work into an execution layer and a consensus layer, but the network, and your ETH, stayed one and the same.

It did not, by itself, make ETH deflationary. The Merge sharply cut how much new ETH is created, but whether ETH's total supply actually shrinks depends on how much is burned versus issued, which moves with network activity. The Merge made ETH far less inflationary; it did not guarantee deflation. The full supply picture is covered in our guide on ETH tokenomics.

From Blofin's operational perspective, the Merge changed how Ethereum reaches agreement under the hood, but nothing about how a user's ETH deposit or withdrawal behaves on our platform changed: the same addresses, the same confirmations, the same asset. The switch was real, and for everyday users it was also invisible. We do not run validators or stake user ETH; we simply kept handling ETH the way we always have, because for users nothing on the surface moved.

The reason this myth-buster matters is trust. When people believe the Merge "failed" because fees did not drop, they are judging it against a promise that was never made. The Merge did exactly what it set out to do. Lower fees were always a separate job for separate upgrades.

If the Merge did not lower fees, what will?

Cheaper transactions come from layer 2 networks, not from the Merge. A layer 2 (or rollup) is a faster, cheaper network that runs on top of Ethereum and settles back to it for security. Most everyday activity is moving there. The Merge did not lower fees, but it cleared the runway for the work that does.

Here is the link between the two. Ethereum's plan is to keep the main chain as a secure base layer and push most user activity onto rollups, where transactions cost far less. This is called the rollup-centric roadmap. Switching to proof-of-stake was a needed first step before that roadmap could move forward.

So the honest summary is this. The Merge cleared the runway; layer 2 networks and later upgrades do the flying. If you want to understand why Ethereum leans on these extra networks and how they cut costs, that is covered in our guide on why Ethereum needs L2s. The mechanics of gas fees themselves, including what makes them rise and fall, live in our guide on Ethereum gas.

What did the Merge make possible later?

The Merge was a foundation, not a finish line. By switching to proof-of-stake, it opened the door to upgrades that proof-of-work could not support. The two biggest follow-ups were staking withdrawals and the path toward much cheaper layer 2 transactions. Both arrived after the Merge, building on the engine it put in place.

The first big follow-up was staking withdrawals. Right after the Merge, people who staked ETH could not yet take it back out. That changed with the Shanghai upgrade, also called Shapella, in April 2023 (source: Ethereum staking withdrawals). From then on, stakers could withdraw their rewards and even take back their full stake if they chose to exit.

The second was scaling. The Merge set up the rollup-centric roadmap described above, and later upgrades pushed it forward. One example is EIP-4844, an upgrade that made data cheaper for rollups, which in turn made layer 2 transactions cheaper for users. None of that was part of the Merge itself, but none of it could have happened without the Merge first swapping in proof-of-stake.

Here is the same story as a short timeline:

Each step built on the one before, and the Merge was the hinge in the middle that made the rest possible.

Frequently asked questions

When did the Ethereum Merge happen?

The Merge happened on September 15, 2022. On that day, Ethereum switched its consensus from proof-of-work, which used mining, to proof-of-stake, which uses staking. It did this by joining the original mainnet with the beacon chain, the staking layer that had launched in December 2020. Mining ended, and the chain has run on proof-of-stake ever since.

Did the Merge lower Ethereum gas fees?

No. The Merge did not lower gas fees, and it was never meant to. Gas fees rise and fall with how busy the network is. The Merge changed how Ethereum reaches agreement, but it did not add capacity, so fees stayed where demand put them. Cheaper transactions come from layer 2 networks and later upgrades, not from the Merge itself.

Did the Merge make Ethereum transactions faster?

Not in any way a normal user would notice. The Merge changed block timing slightly, but the throughput, meaning how many transactions the network can handle, stayed essentially the same. If you were waiting for the Merge to speed up your transfers, that was never one of its goals. Speed and cost improvements come mainly from layer 2 networks.

Did I need to do anything with my ETH after the Merge?

No. Your ETH stayed exactly the same, and your wallet kept working as before. There is no such thing as "old ETH" or "new ETH", and no upgrade or action was needed on your part. Your addresses and balances were untouched. Anyone who told you to move or swap your ETH for the Merge was likely trying to scam you.

How much did the Merge cut Ethereum's energy use?

By about 99.95 percent. Mining required rooms of machines running around the clock and burning large amounts of electricity. By ending mining and switching to staking, Ethereum removed almost all of that energy demand. The change took a very power-heavy network and turned it into a light one, which is one of the clearest things the Merge actually delivered.

Researched and written by the Blofin Academy editorial team with AI-assisted drafting. Primary sources include Ethereum: The Merge and Ethereum: How the Merge impacted ETH supply, with the "did not lower gas fees" point confirmed against Cointelegraph. All facts independently verified against cited documentation current as of June 2026.

This article is for informational purposes only and does not constitute financial advice, investment guidance, or a recommendation to buy, sell, or hold any digital asset. Cryptocurrency markets involve significant risk and you should conduct your own research and consult qualified professionals before making decisions. Blofin Academy content reflects the state of public information at time of publication; network details and upgrade timelines change over time.