EthereumIntermediate

The Ethereum Merge and Proof of Stake

What the Ethereum Merge changed, and why the network moved from proof of work to proof of stake.

6 min readPublished 2026-09-25

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What the Merge was
Why the change was made
What changed, and what didn't
What to remember

Key takeaways

What to remember

The Merge replaced Ethereum's proof-of-work consensus with proof of stake.
The primary stated goal was a large reduction in energy consumption.
Account balances and smart contracts were unaffected by the change itself.
Gas fees are driven by demand, not directly by the consensus mechanism.

What the Merge was

The Merge was the event in which Ethereum's execution layer (where transactions and smart contracts run) joined with a separate proof-of-stake consensus layer that had been running in parallel, replacing Ethereum's original proof-of-work consensus mechanism entirely.

Why the change was made

The stated goals included a large reduction in the network's energy consumption (since proof of stake doesn't require competitive computational mining), and laying groundwork for further scalability improvements planned for the network.

What changed, and what didn't

Changed: how new blocks are proposed and validated — by staked validators instead of miners.
Changed: Ethereum's energy consumption, reported to have dropped dramatically as a direct result.
Did not change: account balances, existing smart contracts, or transaction history — the change was to consensus, not to application-layer functionality.

Proof of Work

Proof of Stake

What a participant spends or risks to earn the right to propose the next block -- computing power under proof of work, staked capital under proof of stake.

Common mistake

The Merge didn't reduce gas fees by itself

Gas fees are primarily driven by network demand for block space, which the Merge didn't directly change. Fee-related improvements have come from separate upgrades and from Layer 2 adoption, not from the consensus-mechanism switch itself.