Ethereum: Here’s why the ETH Merge is not all rainbows and sunshine

The Merge is round-the-corner, and the Ethereum [ETH] builders could also be on cloud 9. Nevertheless, there are a number of considerations which were discovering their approach across the crypto market recently. Nevertheless, the ETH group are rising skeptical of the much-awaited Merge.
It’s not all sunshine out right here
The problems concerning the Merge have additionally been mentioned in a current Altcoin Buzz YouTube video. The primary downside addresses the stablecoin market as most stablecoins are locked in good contracts on Ethereum. This presents a menace to the stablecoin “stability” and we all know how the Luna disaster uncovered stablecoin vulnerability.
Maker DAO even signalled the hurt surrounding the Merge lately. Within the video, it was even claimed that main stablecoins, similar to USDT and USDC might even misplaced their peg attributable to damaging funding. The Merge may additionally result in a perpetual contract backwardation because the futures might commerce beneath the market spot worth. There’s even a rising chance of community outages or downtime throughout the transition to Proof of Stake (PoS).
The Merge additionally poses a threat to the DeFi. As famous earlier, Aave began a governance vote to quickly pause ETH borrowing. The proposal relies on mitigating the dangers of excessive utilization as a result of ETH Proof of Work (PoW) arduous fork.
The chance within the ETH market is pushed by customers probably benefitting from ETHPoW by borrowing ETH earlier than the Merge. Binance additionally claimed that it’s going to pause ETH and ERC-20 deposits and withdrawals throughout the improve.
$ETH and ERC-20 token deposits and withdrawals will probably be quickly suspended on #Binance twice within the close to future at roughly:
🔸 11am UTC, September 6 for the Bellatrix improve
🔸 12am UTC, September 15 for the Paris improve— Binance (@binance) August 25, 2022
Does ETH take successful?
In the meanwhile, ETH is struggling amid sturdy bearish headwinds out there. In response to Coin Market Cap, ETH is on the market at $1,564 after a current sell-off. Nevertheless it has proven resilience over the previous week with 4.27% beneficial properties regardless of gentle losses since 2 September.
Moreover, the group expects {that a} profitable Merge can uplift the worth trajectory for Ethereum finally. It stays to be seen what the Merge will convey to the desk as we proceed to reel below the bear market.