Swiftly after the Ethereum Foundation announced the expected date for The Merge, Binance released its plan to reduce trading risks.
Binance is doing so via a number of changes, including suspending withdrawals, deposits, and changing leverage allowance.
Keeping Users SAFU
Binance will be suspending all ETH and ERC-20 token deposits and withdrawals for 2 occasions:
- The Bellatrix consensus layer upgrade at 2022-09-06 11:00 (UTC)
- The Paris execution layer upgrade at 2022-09-15 00:00 (UTC)
Binance is expecting two scenarios to occur:
- Scenario A: No new token is created and Binance will reopen deposits and withdrawals ASAP
- Scenario B: There will be a fork and new tokens are created. The “ETH” ticker will be used for the Proof-of-Stake chain and Binance would credit users the forked token at a 1:1 ratio based on the snapshot taken before the Paris execution layer upgrade.
Binance will also suspend all ETH cross and isolated margin borrowing from 2022-09-14 00:00 (UTC) to approximately 2022-09-16 00:00 (UTC).
For ETH futures trading, Binance will take the following protective measures which include but are not limited to:
- Adjusting margin tiers like maximum leverage value and maintenance margin in each tier
- Changing constituents of price index
- Using last price protected mechanism to update the mark price
- Updating funding rates including the interest rate, premium, capped funding rate and settlement frequency.
If there is a chain split, the price index of futures contracts would be tracking the “ETH” ticker which is the Proof-of-Stake chain.
Binance Crypto Loans will stop ETH borrowing from 2022-09-14 00:00 (UTC) to approximately 2022-09-16 00:00 (UTC).
Binance will suspend deposits and withdrawals for BETH (Its version of staked ETH) from 2022-09-14 00:00 (UTC) to approximately 2022-09-16 00:00 (UTC). Holders of BETH may or may not receive the potential forked token.
After the merge, Binance Pool will delist ETH mining service and the current users of the ETH Pool can transfer their existing hashrate to the ETC pool.
The Merge is one of the biggest crypto events of 2022 and could potentially break Ethereum and hurt the crypto ecosystem.
It involves the transition from the energy-intensive Proof-of-work (PoW) system to a more energy-efficient Proof-of-stake (PoS) system. Not only will it reduce electrical consumption, but also aims to improve scalability and decentralization.
The Ethereum Foundation just announced that the Bellatrix upgrade is scheduled on 6 September 2022 on the Beacon Chain. The Bellatrix upgrade is a consensus critical change that has to be up before The Merge can happen.
It also announced that the Paris upgrade will shift Ethereum mainnet to Proof-of-Stake upon hitting the Terminal Total Difficulty.
If everything is on schedule, the merge is expected to happen between 10 – 20 September 2022.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
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