BigONE Insights: The Ethereum Merge Is Finally Complete
On September 15th, Vitalik Buterin, co-founder of Ethereum, tweeted to confirm the Ethereum blockchain’s historic transition from POW to Proof-of-stake consensus. This is arguably one of the most significant events in DeFi history, with Ethereum core developers claiming that The Merge has been in the works for more than 40 months. Ethereum announced the merger to address energy consumption issues, which are frequently cited by cryptocurrency skeptics as a negative impact of cryptocurrency on the environment, by transitioning to POS as a way of reducing energy consumption and onboarding more people into the cryptocurrency space.
Many blockchain enthusiasts believe this is the right step for the future of decentralized finance and cryptocurrency, and Sean Ford, CEO of Algorand, another POS chain, agrees. “Ethereum has a chance now to be a productive, aligned, forward-thinking technology compared to one that was rooted in high energy consumption and below par from a transaction or cost perspective,” he said. BigONE will look at what is expected to happen after the merge and why the price of Ethereum has dropped since the merge was completed in this article.
Ethereum’s Roadmap
Following the merger, Ethereum has laid out a roadmap that includes the Surge, Verge, Purge, and Splurge, all aimed at ensuring scalability, security, and the advancement of the Ethereum ecosystem. Since its completion, the merger has had little to no effect on the price of Ethereum, with the price even falling by 7%, much to the surprise of cryptocurrency traders. Ethereum’s energy consumption has been reduced by 0.2% due to the merge.
Ethereum Forks
ETHPOW tokens were airdropped immediately after the merger was completed and have dropped by approximately 65% since launch due to technical issues with its chain ID. Ethereum classic, the original Ethereum chain that was hard forked during the 2016 DAO hack, has seen its price rise, with disgruntled Ethereum miners migrating to the chain to continue mining operations. BigONE believes that most of these forked tokens will inevitably go to zero and advises our users to proceed cautiously when investing in forked tokens.
The Impact of the Merge On DeFi
In the long run, the merge would undoubtedly be a significant driver of innovation across the entire DeFi ecosystem. In addition, the merger would provide the security, scalability, and high throughput required for decentralized applications to thrive in the DeFi space. As we get closer to displacing traditional finance, milestones like this remind us of Ethereum’s primary goal: to build the very essence of decentralized finance. Many blockchain enthusiasts believe this will significantly impact the price of Ethereum and other DeFi assets within the Ethereum ecosystem during the next bull run. When asked about Ethereum’s future by Techcrunch, co-founder of Arbitrum Steven Goldfeder was quoted as saying, “One of the beauties of the Merge that we see is Ethereum has a long technical road map, but it’ll never be complete.” There is never a point where we are finished. Technology will only improve over time. We will continue to innovate and improve.”
The merge would increase cryptocurrency adoption, especially with the reduction in energy consumption. Proof of stake would also allow users to earn a passive yield on Ethereum while playing an active role in the Ethereum ecosystem’s governance. Ethereum has taken another step toward further decentralization, which will drive the change across other DeFi protocols. BigONE would advise our users to conduct thorough research before investing money in any digital asset.
