Recap


After years of development, the Ethereum Blockchain will transition from a Proof of Work Blockchain to a Proof of Stake Blockchain. During the week of September 12th the Ethereum Merge will be the merging of the Beacon Chain’s Proof-of-Stake (PoS) consensus method with the EVM state of the Proof-of-Work (PoW) chain.

Frequently Asked Questions


Will this impact my Donut account or funds?

No. Some of our partners will temporarily disable all Ethereum-related functionalities, including orders, withdrawals, and deposits. However, Donut has taken appropriate steps to make sure that no user accounts are impacted by any delays and that all app functions remain operational during the merge. Your funds will also continue to be safe, overcollateralized, and fully liquid. You can always check up on our liquidity on our Proof of Reserves page.

Are there any risks?
So far, the Ethereum Foundation's testing in preparation for the merge has gone well, and the merge happened successfully on the test net. In production, where there are billions of dollars at stake, it's expected that there might be a bit of short term market instability. Good news though, your APY at Donut is market neutral. Rising or falling crypto prices don’t affect Donut’s APY, nor your funds. When prices go down, your funds stay protected and continue earning 5% APY. When prices go up, your funds stay protected and continue earning 5% APY. Overall the risk of failure is shallow, but we will keep a close eye on all activity and act accordingly in coordination with our partners.

Does this make Ethereum more secure?

The Merge will usher in a new penalty system for any malicious actors attacking the Ethereum chain. This new system will employ slashing and validator shuffling to ensure that any attempts on the ETH network will be thwarted, unrepeatable and punishable.

How will Donut keep its community up to date during the merge?

We can always be reached in-app from your home screen or via email at [email protected]. During the merge, we will also be available on social media.

When is the Merge going to happen?
The estimated merge date is September 13, 2022, but the exact time will become more apparent on Monday, September 12th.

Are our partners excited about this?

Our partners, Circle (USDC's issuer), Wyre, Genesis, Fireblocks, and the industry at large will support Proof of Stake.

What is the difference between Proof of Work and Proof of Stake?
The Ethereum and Bitcoin networks are now running on a Proof of Work algorithm, which requires a large quantity of servers to solve mathematical puzzles to mine new blocks and confirm transactions. To maintain such a network of computers, you need a lot of electricity which is very inefficient. This also limits scalability and further upgrades.

Ethereum will migrate its algorithm from Proof of Work to Proof of Stake, which removes the need for servers to solve puzzles and randomly assigns the right to create a block to one of the validators (depending on the amount of Ether they own). Proof of Stake algorithm declines energy consumption by about 99.95% while maintaining similar network security.

Are there any resources I can follow along with?

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