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What Happened On Ethereum (ETH) Side After The Merge?

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The highly anticipated Merge on Ethereum was successfully completed about 10 days ago (on September 15). Merge represents the first step in the Ethereum Blockchain's transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). After the Merge upgrade, there are 4 more main stages. These are called Surge, Verge, Purge, and finally Splurge, respectively. So what happened on the Ethereum side after Merge?

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Merge included the most important technical updates since the inception of Ethereum, and after Merge, Ethereum moved from Proof-of-Work (PoW) to Proof-of-Stake (PoS). After the merge, Ethereum issuance is expected to drop by about 600,000 per year and about 2.7 million ETH to be burned. In other words, it is expected that net 2.1 million ETH will be burned annually. The current data shows that all is well.

The transition will help scale the Ethereum network and at the same time reduce energy consumption by 95%. There will also be a significant drop in Ethereum inflation, meaning less Ethereum in circulation.

If Ethereum was still running as Proof-of-Work, 21,117 new ETH would have been produced in about 10 days. ETH supply has decreased to 425 ETH issued in about 10 days as there is a transition to Proof-of-Stake. It is very important that the supply of an asset decreases, and in the future, when there is high demand, the price can increase significantly.

Ethereum is currently trading at $1297. After the Merge, Ethereum dropped about 25%. Before Merge, Ethereum was trading around $1630. Of course, this drop is also linked to general drop in the crypto market. But on the other hand, after Merge, there has been a significant change in the behavior of addresses holding large amounts of ETH. Addresses holding 1k to 10k ETH have dropped 2.24% of their cumulative holdings. Also, addresses holding 100 to 1k ETH dropped by around 1.41%.

Frankly, rumors and news have been quite influential in Ethereum's sharp decline. But perceptions may change in the coming days. Ethereum has a market cap of more than $159 million and is the second largest cryptocurrency by market cap. It is very important that the Ethereum supply is decreasing, and if ETH sees high demand in the future, it can rise faster than its previous rises.

Posted Using LeoFinance Beta