Technical analysis on BendDAO and Ethereum’s PoS Merge

Technical analysis for the BendDAO community on why the upcoming transition of Ethereum to Proof-of-Stake (The Merge) should not affect BendDAO’s systems.

How does the Merge upgrade affect BendDAO?

Even if critical from a high-level perspective of the Ethereum network, for our analysis, The Merge/Paris upgrade should affect the BendDAO system really slightly, with no immediate action needed. This is because the upgrade has been designed to be the less disruptive possible for running applications on Ethereum.

For a full explanation of how The Merge affects the application layer, the Ethereum Foundation has published a detailed analysis HERE.

Regarding the different points where BendDAO could be affected:

  • Block structure. BendDAO IS NOT AFFECTED. In general, the upgrade keeps all the previous fields on the block header, but the BendDAO smart contracts don’t really depend on the block header’s structures at the moment, given that techniques like storage proofs are not used.
  • Block time. BendDAO IS NOT AFFECTED. In practice, block slots will become shorter in duration, from a variable time of ~13.5s to a fixed time of 12s (with the exception of missing blocks, which are supposed to happen only 1% of the time). BendDAO systems, like the liquidity pools, don’t do calculations based on blocks, but in seconds, so those don’t get affected.
  • Opcodes’ changes. BendDAO IS NOT AFFECTED. Only blockhash and difficulty will be affected, but the BendDAO smart contracts don’t depend on those.
  • Sources of on-chain randomness. BendDAO IS NOT AFFECTED. There is no mechanism on the BendDAO smart contracts operating with randomness.
  • New concepts of safe head and finalized blocks. BendDAO COULD BE SLIGHTLY AFFECTED, BUT NOT ON SMART CONTRACTS. 2 new statuses are introduced into the “confirmation” lifetime of proposals. This could disrupt certain off-chain infrastructure of BendDAO (e.g. BendDAO UI), but we expect the Web3 libraries to abstract this behavior, keeping complete backward compatibility.

So, from a technical/operational perspective, BendDAO only gets slightly affected potentially on the BendDAO UI.

But what if there is a fork of the Ethereum chain?

Given the criticality and change of paradigm on the consensus layer of Ethereum, there are some rumors circulating about a potential fork on The Merge, keeping a parallel Ethereum running with Proof-of-Work consensus.

There is not really much substance about this fork, so in practice, The Merge should happen as any other previous upgrade of Ethereum. Aspects that support BendDAO transitioning transparently with Ethereum to the application layer of Proof-of-Stake (and only there) are:

  • From the perspective of an application layer like BendDAO, The Merge is just another update similar to Gray Glacier, or any other of the previous. It is true that the consensus layer changes, and this is an important paradigm change, but there is not much reason to think that a Proof-of-Work Ethereum fork would get more traction than the Proof-of-Stake, and be considered canonical.
  • The BendDAO protocol doesn’t live in complete isolation on a network like Ethereum, it communicates with other systems, like the assets listed themselves, other liquidity venues like DEXes, wallet providers, etc. Without any external liquidity, the BendDAO system will not really be functional.
  • The Beacon chain, even if not connected to the consensus layer of Ethereum, has been running actively for almost 2 years. There are thousands of validators, and even completely new products and systems building on the future Proof-of-Stake, like Lido and their stETH asset.
  • All major Ethereum node clients with a long history (and new ones) are preparing their software for The Merge, so seems unnatural for a movement running an outdated version of that software to get significant traction.
  • BendDAO focus on the Ethereum ecosystem since its inception. The BendDAO community and ethos heavily overlap with Ethereum one. It seems natural to follow the approach of supporting the Ethereum community direction.

We think those previous points are strong enough to consider only Ethereum the post-merge Ethereum with Proof-of-Stake. Given the lack of functioning oracles and liquidity issues on both centralized and decentralized assets, the BendDAO system will not work properly on any potential Proof-of-Work fork.


The Merge is scheduled for its last phase next week, with the Bellatrix and Paris upgrades happening on the Goerli test network.

Soon after, The Merge will happen on Ethereum mainnet, and from our analysis:

  • No smart contract related to the liquidity protocol will get affected.
  • There could (but should not) be some small adaptations needed for the BendDAO UI.
  • As always, BendDAO will only work properly on the adopted majority chain, in this case, Ethereum PoS (chainId == 1). So any potential forks should be initially ignored.
  • According to community voting, we may choose to pause protocol on the fork chain.
  • If there’s any airdrop on the fork chain, we will distribute it to BendDAO community, etc. depositors.
  • It is possible that there will be more volatility and bridge activity from/to Ethereum. This topic should be further evaluated by other entities working with the community. We will monitor the situation, for if any technical reaction (e.g. via governance proposal) would be necessary.

We encourage the community to use this thread if there is any question of technical nature about the topic.


  1. BGD. Technical analysis Aave <> Ethereum's PoS Merge - Development - Aave.
  2. The Merge |
1 Like

don’t think that we need to do anything about the merge.

Maybe some administrative operations need to do before and after the merge:

  • pause the protocol temporarily a few hours before the merge;
  • pause the protocol on the fork chain permanently;