It has been a year since the Merge took place, and the world’s second-largest cryptocurrency, Ethereum, has undergone significant transformations. This article delves into the various changes and developments that Ethereum has experienced since the Merge, shedding light on its progress in a dynamic crypto landscape.
Among the noteworthy changes post-Merge, one significant development is the burning of Ethereum tokens. As Ethereum transitioned from a proof-of-work (PoW) consensus to proof-of-stake (PoS), approximately 980,000 ETH has been burned according to Sassal, a prominent figure in the Ethereum community. This shift was made possible by the London hard fork, which introduced a fee-burning mechanism. Transaction base fees are now permanently removed from circulation, making Ether deflationary. Consequently, Ethereum’s supply is down by 0.25% since the implementation of the Merge.
The Merge not only revolutionized the consensus mechanism but also altered the network’s security infrastructure. Validators, who stake their ETH, now safeguard the Ethereum network, replacing the miners who were the backbone under the PoW consensus. More than 11.6 million ETH has been staked by users, serving the dual purpose of network security and passive income generation.
Leading the pack of top stakers is the Lido DAO, an innovative staking platform, with a market share of 22.64%, as reported by Dune Analytics. Noteworthy exchanges such as Coinbase, Binance, and Kraken have also become prominent stakers. This transition reflects the growing interest and participation of major players within the Ethereum ecosystem.
Expanding the Network: Influx of Validators
The Merge has effectively increased the number of validators within the Ethereum network. A staggering 362,000 new validators have joined the network, contributing to its security and decentralization. This growth signifies the trust and belief in Ethereum’s new consensus model.
While Ethereum’s price has risen by approximately 11% from a year ago, it may seem insignificant when compared to its all-time high of $4,891. Nonetheless, the Merge has proven beneficial for Ethereum’s overall value, particularly in the current bear market. The annual inflation rate of ETH has decreased post-Merge, indicating a more stable ecosystem. Additionally, Ethereum’s layer-2 chains have experienced a surge in trading activity, suggesting increased adoption and user engagement within the Ethereum community.
Ethereum’s fundamental strength has attracted the attention of traditional financial institutions (TradFi). Cathie Wood’s ARK Invest recently filed to offer an Ethereum Spot ETF, marking a momentous milestone in the mainstream adoption of Ethereum. Other institutions have also expressed interest in offering Ethereum futures ETFs, reinforcing the ecosystem’s stability and potential for growth.
The year following the Merge has witnessed substantial changes and progress within the Ethereum network. From the burning of ETH and the rise of validators to the increased interest from traditional financial institutions, Ethereum continues to evolve and redefine its role within the crypto landscape. As Ethereum advances, it solidifies its position as a pivotal force in the world of decentralized finance, driving innovation and embracing widespread adoption.