As we mark the first anniversary of the Ethereum Merge, it’s time to reflect on the transformations that have transpired in the Ethereum universe, the second largest cryptocurrency by market capitalization. From the burning of 980,000 ETH to the implementation of the London hard fork, Ethereum’s evolution has been nothing short of remarkable.
A Look at the Changes Post-Merge
One of the most prominent figures in the Ethereum community, Sassal, noted that the Ethereum Merge has led to the burning of 980,000 ETH, a consequence of Ethereum’s transition from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) consensus. This transition was part of the larger Ethereum Merge.
Prior to the Merge, Ethereum introduced a significant upgrade known as the London hard fork. This upgrade ushered in a fee-burning mechanism, which instantly burns transaction base fees once a transaction is processed. The aim was to make Ether deflationary, with a percentage of tokens being permanently removed from circulation. As a result, Ethereum’s supply has decreased by 0.25% since the Merge.
Securing the Network: Validators vs Miners
The Ethereum Merge has also seen a shift in the way the network is secured. The responsibility now lies with validators who stake their ETH, unlike before when miners were the network’s backbone under the PoW consensus. Since the Merge, over 11.6 million ETH has been staked to secure the network, with stakers earning passive income in return.
The leading stakers include the staking platform Lido DAO, which holds a market share of 22.64% according to Dune Analytics data. Other top stakers are major exchanges like Coinbase, Binance, and Kraken. The number of validators on the network has also significantly increased since the Merge, with 362,000 new validators joining the network.
Ethereum’s Value: More Than Just Price
Although Ethereum’s price has only increased by approximately 11% since the Merge, the value of Ethereum extends beyond its market price. The Merge has enhanced Ethereum’s value, with its annual inflation rate decreasing and trading activity on Ethereum’s layer-2 chains significantly increasing. This indicates that more individuals are entering the Ethereum ecosystem, even amidst the current bear market.
Notably, traditional financial institutions are showing an increased interest in ETH. For instance, Cathie Wood’s ARK Invest recently filed to offer an Ethereum Spot ETF, a first of its kind. This, along with other institutions filing to offer an Ethereum futures ETF, suggests that Ethereum’s fundamentals are strong and the ecosystem is stable and healthy.
For those interested in tracking the ongoing evolution of Ethereum post-Merge, the cryptoview.io application offers a comprehensive and user-friendly platform.
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