Looking Back 1 Year: Ethereum Post The Merge
Exactly one year ago, on September 15, 2022, Ethereum completed the historic upgrade known as The Merge, ushering in a new era for the cryptocurrency market.
Looking Back 1 Year: Ethereum Post The Merge
It has now been a year since Ethereum successfully activated The Merge upgrade. This was a monumental moment for the entire Ethereum ecosystem and the crypto industry at large.
The Merge also entered the list of the top 22 standout events of 2022 as voted by Coin68.
So, what has Ethereum achieved in the year following that historic September 15, 2022?
Deflationary Coin
One of the significant features that The Merge brought to the Ethereum blockchain was creating deflationary pressure.
While still a Proof of Work blockchain, ETH had an inflation rate of 3.15% per year. However, in the first year post The Merge:
679,000 ETH were issued
981,000 ETH were burned
Total: -302,000 ETH
Source: ultrasound.money
This means that the ETH supply decreased by 0.25% per year. At the time of reporting, approximately $489 million worth of ETH had been burned.
1H chart of ETH/USDT pair on Binance at 12:15 PM on September 15, 2023
Furthermore, it's important to note that over the past year, during the downtrend period, blockchain activities were not as vibrant. It is anticipated that during the upcoming bull-run phase, skyrocketing gas fees will accelerate the coin burning rate.
Pioneering Liquid Staking
Proof-of-Stake, with its staking feature, has been long-awaited for ETH. According to data from DefiLlama, there is currently $19.5 billion worth of ETH staked across various protocols, with Lido Finance capturing 72% of the market share.
Source: DefiLlama
Liquid Staking has become one of the largest segments in DeFi, bringing tokens from these protocols into the focus of investors, such as LDO, FRAX, and RPL.
However, the overly concentrated market share in Lido has sparked considerable debate within the community, raising questions about decentralization and potential risks. This is a topic the Ethereum community hopes to address in the near future.
Reduced Energy Consumption
According to data from The Cambridge Centre for Alternative Finance, the amount of electricity consumed by the Ethereum network decreased by 99.9% post The Merge.
Source: CCAF
This has helped ETH escape criticism regarding energy consumption and environmental impact, presenting itself as a more environmentally friendly coin.
Ethereum core developer Marius van der Wijden commented to DL News:
"Before The Merge, whenever someone discussed crypto or Ethereum, the conversation would immediately turn to energy consumption and emissions.
Post The Merge, we now have improved blockchain metrics that no longer impact the environment."
Nick Ashley, Marketing Director of Rocket Pool, shared:
"The shift away from being an environmental polluter has improved the image of Ethereum specifically, and public blockchains in general.
Traditional financial organizations can now consider adding ETH to their investment portfolios while maintaining environmental policies."
