Ethereum merge is one of the biggest events in the crypto market that is expected to have lasting impacts. It is evident from the fluctuations in the value of $ETH as it went through changes with the news of the merge. The impacts of the Ethereum merge will be vast because of the large number of protocols and DApps based on Ethereum. The integration aims to make Ethereum more efficient, scalable, and sustainable. The merge will upgrade Ethereum’s system and shift to a new system that will bring ease and other benefits to the users.
Ethereum merge is the transition of the Ethereum blockchain from Proof of Work to Proof of Stake. It is a complex multi-step process that has faced impediments multiple times due to technical issues. It was scheduled to be complete in July, but the technical team has extended it to September. Once the merge is complete, it will change the consensus protocol for Ethereum. It is the first of its kind, as no blockchain of this size has gone for this tremendous overhaul.
The upgrade was deemed necessary because it needed to change the method of processing transactions. Proof of Stake makes the process easier by staking Ethereum. It will require staking members to have at least 32 ETH. They will receive the reward in the form of $ETH by contributing to the system. The merge will lower the risk of Ethereum being controlled by big corporations, while users will benefit in the form of $ETH.
According to the Huobi research, the impacts will be multifold for the market. These include shrinkage in the issuance of ETH, which will lower by 90%. It will also increase the number of staked Ethereum. The staked Ethereum will reach 13.4 million, reducing the in-circulation ones. It will lead to a considerable increase in the value of $ETH. Also, as the miners shift from Ethereum to ETC, it will strengthen the ETC price. If the Ethereum transfer hashrate exceeds 10%, it will increase the ETC price by 4 times.
The net new production for ETH will change, and the annual deflation rate before the merge would be 2.39%. The total staking rewards after the merge will experience a small change, but the total rewards will remain constant at 583,100 ETH. The demand for staking will increase after the merge, and tips will be imposed on the original Beacon Chain. Forking stands the chance of becoming an independent ecosystem if the forking proposal receives support. The biggest beneficiary of this change is ETC, which is expected to see a rise in the price of about 4 times.