ZETH and the Ethereum Merge – What investors need to do now. The Ethereum Merge is mere days away. This is the long-awaited software upgrade that will move the second-largest digital asset away from the Proof of Work mining consensus mechanism that it shares with Bitcoin, and towards the newer Proof of Stake model.
Turning off mining on the Ethereum network will reduce its energy consumption by 99.95%.
What do ZETH holders need to do now?
The Merge will take place at around 2.54am UTC on Thursday 15 September, and will take around 12 minutes to complete.
Investors who hold ETC Group’s 100% physically-backed Ethereum ETP, ZETH, do not need to do anything or move ZETH between accounts. Everything will be taken care of automatically.
Investors who do not currently hold ZETH will need to purchase the ETP by the end of the trading day on 13 September 2022 to be eligible for the free ZETW. This is due to the standard market infrastructure of T+2 settlement.
There is no separate token for Merged Ethereum Proof of Stake. Everything stays exactly the same. Investors who hold ZETH will continue to see ZETH in their accounts as normal after the Merge is complete.
However, there is expected to be a split — called a ‘hard fork’ in the Ethereum blockchain. This means two Ethereum chains will exist after the Merge. One will be Proof of Stake Ethereum, and one will be a continuation of the Proof of Work Ethereum chain.
ZETH holders get free ZETW
ETC Group has launched an ETP called ZETW, tradable on all the same exchanges as ZETH, to represent this stake.
If investors hold ZETH at the time of the Merge, they will not only continue to keep their ZETH, but will also receive free units on a 1:1 basis that represent a stake in the Proof of Work Ethereum chain.
So if an investor holds 1,000 units of ZETH, they will receive 1,000 units of ZETW in their accounts post-Merge.
You can find more details in our notice to bondholders here. Additionally, ETC Group has produced a landmark 40-page research report — available for free here — that details everything investors need to know about the Ethereum Merge.