September 7, 2022 • 20 min read One of the most anticipated events in the history of the digital asset industry is set to take place in September – The Ethereum Merge. This is expected to bring about a host of emerging investment narratives for crypto’s second largest asset by market cap and largest smart contract platform.i In this report, we cover what you need to know about The Merge, including the key topics below: The Ethereum Merge, expected to take place on September 14, 2022,ii will transition the Ethereum network’s consensus mechanism from proof-of-work to proof-of-stake. With staking, miners are replaced with validators posting collateral and attesting to transactions, and competition is replaced with randomization. The Merge is expected to have several potential benefits such as decreasing Ethereum’s energy consumption by over 99%.1 It also comes with potential risks, including centralization concerns, technical challenges, and liquidity concerns for stakers. This milestone is not the end of Ethereum’s evolution towards an eventual mature state. The next series of upgrades following this event will be centered around transaction speed and cost – known as scaling.2 Download the report: The Ethereum Merge Share: Download Article i At the time of writing, 8/10/2022, per CoinMetrics ii At the time of writing, the latest target date is September 15, 2022 per The Ethereum Foundation blog and developer call https://blog.ethereum.org/2022/08/12/finalized-no-36/ 1https://ethereum.org/en/energy-consumption/ 2https://ethereum.org/en/upgrades/vision/ The information herein was prepared by Fidelity Digital Asset Services, LLC and Fidelity Crypto LC, Ltd. It is for informational purposes only and is not intended to constitute a recommendation, investment advice of any kind, or an offer or the solicitation of an offer to buy or sell securities or other assets. Please perform your own research and consult a qualified advisor to see if digital assets are an appropriate investment option. Custody and trading of digital assets are provided by Fidelity Digital Asset Services, LLC, a New York State-chartered, limited liability trust company (NMLS ID 1773897) or Fidelity Crypto LC, Ltd. Fidelity Crypto LC, Ltd. is registered with the U.K. Financial Conduct Authority for certain cryptoasset activities under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The Financial Ombudsman Service and the Financial Services Compensation Scheme do not apply to the cryptoasset activities carried on by Fidelity Crypto LC, Ltd. This information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Persons accessing this information are required to inform themselves about and observe such restrictions. Digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high-risk tolerance. Investors in digital assets could lose the entire value of their investment. Fidelity Digital Asset Services, LLC and Fidelity Crypto LC. Ltd. do not provide tax, legal, investment, or accounting advice. This material is not intended to provide, and should not be relied on, for tax, legal, or accounting advice. Tax laws and regulations are complex and subject to change. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Some of this information is forward-looking and is subject to change. Past performance is no guarantee of future results. Investment results cannot be predicted or projected. Fidelity Crypto LC and the Fidelity Crypto LC logo are service marks of FMR LLC. © 2022 FMR LLC. All rights reserved. 1046035.1.0