**UPDATE** As of 1pm EST on September 15, 2022, ETH and ERC-20 withdrawals and all other services are back to normal operations.
Finally, The Merge is almost here as the Ethereum network is scheduled to undergo some major changes.
At BlockFi, one of our core pillars is “Clients, not Customers.”
This means we’re here for you. You’re more than just a number to us and you deserve to be treated as a valued stakeholder. With this in mind, we want you to know the important facts about The Merge and what it means for you as a BlockFi client so you’re empowered to make your own informed financial decisions.
We’ll continue to update this blog post as new developments arise.
What is The Merge?
“The Merge,” the nickname for Ethereum’s transition from a proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism, is slated to complete mid-September 2022 (TTD 58750000000000000000000).
The Merge has been a work in progress for years to solve some of crypto’s biggest challenges: scalability, security, and sustainability.
Since inception, Ethereum has used PoW to approve new transactions on the network, but it’s energy-intensive and has scaling limitations.
This transition from PoW to PoS replaces mining with staking to verify transactions on Ethereum. With PoW, miners run nodes using powerful computers to compete to solve complex ‘math problems’ to approve new blocks and earn rewards. With PoS, validators stake their tokens to run nodes, which are randomly selected to approve new blocks and earn rewards.
The Merge is Ethereum’s most significant upgrade in history and represents a huge step forward for the network’s scalability roadmap while reducing energy consumption by up to 99.95%
What does The Ethereum Merge mean for me as a BlockFi client?
What will happen to my ETH on BlockFi post-Merge?
Your tokens on BlockFi will be safeguarded through this upgrade. All ETH on BlockFi will be migrated from PoW to PoS at the time of The Merge and requires no action by you.
Is there any action required on my end?
No, we’ll handle everything. You won’t be affected in any noticeable way by The Merge.
That being said, stay on high alert for scams
leading up to The Merge. Be suspicious of anyone who asks you to send ETH to “upgrade to ETH2”—there is no “ETH2” token
and sending your ETH to another address is irreversible.
Will BlockFi pause transfers, withdrawals, or trading?
Transfers: There may be a potential delay in reflecting transfers into your account in the event of ETH network delays; please rest assured your assets are safeguarded. Note that any potential PoW tokens sent to BlockFi after the Merge will not be credited and may not be able to be returned.
Withdrawals: As a precaution, BlockFi will not process ERC-20 crypto withdrawals for 1 business day leading up to The Merge and up to 1 business day following Merge completion. Any interruptions caused by third parties or network issues may extend the pause on the withdrawal processing period.
Trading: We don’t anticipate any pauses to trading.
We’ll let you know as soon as possible via Twitter
and this blog post when ETH and ERC-20 withdrawals are available again.
What is a forked token?
When a token’s community disagrees on an issue, the community can vote to change a token’s existing code, thereby creating a new version of a network. A forked token represents the old version of a network. In the instance of the ETH Merge, the fork may be caused by miners on the existing ETH PoW chain continuing to operate.
What happens in the event of forked tokens?
We determine how to handle forks and airdrops on a case-by-case basis. We consider several factors, such as network stability, token liquidity, exchange and custodial availability, and tokens received by BlockFi.
Separately, if we do decide to list any forked tokens for trading or transfers and withdrawals, we’ll communicate this information in a separate announcement.
At the time of The Merge, a snapshot of balances will be taken. If BlockFi receives any forked token(s) as a result of The Merge that can be allocated to clients' BlockFi accounts, we will decide, at our sole discretion, if token(s) will be allocated at a later date after internal evaluation is completed. Any forked token allocations will be proportional to clients’ ETH balances captured in the snapshot and will be subject to our terms of service. BlockFi’s evaluation for allocation will depend on several factors, such as forked chains’ network stability, token liquidity, and exchange and custodial/wallet availability.
Accrued rewards and/or interest are not eligible for allocation of forked assets, only those assets that show as part of the current balance will be captured in the snapshot.
How is BlockFi handling ERC-20 tokens?
We’ll support ERC-20 tokens on PoS only.
Is there anything else I need to know?
We’ll keep you up-to-date with any new developments via our Twitter
and in this blog post.