Ethereum Merge successfully implemented… Now what?

Ethereum has successfully transitioned to proof-of-stake in the biggest blockchain upgrade ever. No hiccups or major errors upon transition — but issues could still appear over the next few days.

On the surface, traders and Ethereum users will barely notice a difference. But underneath the surface…

Ethereum miners aren’t needed anymore. No more using expensive equipment to mine Ethereum, which is estimated to reduce electricity consumption by 99%.

Instead, users can stake their Ethereum tokens. By “staking” — locking in your Ethereum tokens — users are rewarded with Ethereum (~4% yield).

Ethereum becomes deflationary. ~220 ETH (~$355K USD) has already been burned within 13 hours — decreasing the total supply of $ETH.

• Basic supply and demand — supply goes down; price should go up (all else staying equal).
• It’s similar to stock buybacks — which decrease the market’s available shares.

What’s next? The work continues…

Ethereum’s co-founder Vitalik Buterin estimated that the blockchain is still only 55% complete. Dr. Buterin Seuss has already outlined the next upgrades: The Surge, Verge, Purge and Splurge.

• Focus: Each upgrade focuses on different technical aspects of the network, which will take many (many) years.
• Goal: Address another one of Ethereum’s largest problems: slow and expensive transactions.

Not the price movement many wanted

A Bernstein research report (CoinDesk) said the Merge — which completely changes the model — will likely lead to strong institutional adoption. Still, investors are shunning risky assets as inflation and interest rates take center stage.

In the 12 hours following the Merge, $ETH dropped nearly 10% — falling alongside the broad market yesterday. Under different economic conditions, the Merge might have performed differently.