The ethereum merger is expected to take place around September 15 and will perhaps be one of the most significant historical moments in ethereum’s history. While the crypto ecosystem will benefit from this, not everyone will be a winner. We have sorted out the 3 potential biggest winners and the 2 biggest losers. Let’s take a look.
The Biggest Winner After Ethereum Merger: ETH
The biggest impact on Ethereum after the merger is that ETH’s market value may surpass BTC and become the new king of cryptocurrencies. While this potential impact may seem far-fetched to some, there is no doubt that the price action surrounding the combined ETH has been on the radar of market participants. According to Coingecko data, although the current ETH price is still a long way from the all-time high of $4,878.26, it has risen by 10.3% in the last seven days, while BTC has risen by 8.0% in the same period.
On the other hand, ETH will be more closely linked to macroeconomic factors after the merger of Ethereum. Chris Terry, VP of Enterprise Solutions at SmartFi, said that in the long run, the world needs more efficient blockchains, so ETH will be the ultimate winner, but having said that, due to macroeconomic implications, no matter what the combined proof-of-stake consensus mechanism is Well, there may still be some risks to ETH in the context of a lower global economy and a slump in the stock market.
The other two winners from the Ethereum merger: DeFi and NFTs
Today, hundreds of DeFi ecosystem projects are built on the Ethereum blockchain, as are many NFT projects, and the Ethereum merger will be one of the biggest drivers of DeFi and NFT growth.
At this stage, the hardware and energy consumption of NFT casting is relatively large. Many environmentalists even described that “casting an NFT is like burning down a forest”, and after the merger, the energy consumption of the Ethereum blockchain will be greatly reduced. Santiago Portela, CEO of FITCHIN, said: “The merger is only the first step in the expansion of Ethereum, and eventually the entire network will become cheaper, faster and easier to use. Of course, mergers are the cornerstone of all this, and this cornerstone for DeFi Services like NFTs and NFTs are critical as both DeFi and NFTs require faster and cheaper blockchain support. In short, all applications that rely on Ethereum will ultimately benefit from this transition to proof-of-stake. “
GOGO Protocol founder Krugljakow added: “While the merger itself won’t immediately make Ethereum faster and cheaper, it sets the stage for subsequent upgrades. That’s why it’s such an important event.”
The Biggest Loser After Ethereum Merger: PoW Miners
As mentioned above, after the merger, Ethereum will switch from a proof-of-work (PoW) consensus mechanism to a proof-of-stake mechanism, and the energy consumption will also be reduced by 99.95%, which means that most expensive and energy-intensive mining machines will become useless. , miners will also be the biggest losers after the Ethereum merger. Freddy Zwanzger, head of the Ethereum ecosystem at crypto infrastructure firm Blockdaemon, put it bluntly:
“The biggest losers from the Ethereum merger will be PoW miners, and while they may try to build PoW-ETH, it won’t be a long-term success, and validators who stake ETH will obviously benefit from higher rewards.”
According to the losers in the 2022 Digital Asset Outlook Report released by The Block Research, Ethereum miners generated $16.5 billion in revenue, a 678% increase year-on-year, a record high, mainly due to the surge in NFT activity in the second and third quarters. Transaction fee income increased. In fact, Ethereum hardware miners have invested billions of dollars in hardware equipment that will soon become useless once the merger is complete and they will need to migrate to mine other crypto assets that are clearly more profitable than ETH much lower.
Another Loser After Ethereum Merger: Speculators
It should be noted that although the Ethereum merger will bring many positive changes to the network and ecology, the upgrade process is still very complex and has great uncertainty, which may lead to increased volatility in the crypto market. Speculators may end up failing.
ECO CEO Andy Bromberg explained: “Given the technical complexity of the merger, unexpected issues may arise, and while the testnet merger has generally gone well, there are still unknowable risks associated with a migration of this scale. Second, the hub Both decentralized and decentralized products—whether lending protocols or exchanges—may have problems with forks. After a merger, multiple blockchains will suddenly coexist, which can also cause a series of problems. “
Not only that, the uncertainty after the Ethereum merger is likely to have a “ripple effect” that will eventually ripple through to Bitcoin and the broader crypto market, causing “a lot of confusion” in the entire crypto/DeFi space, so I think in this process Those who speculate in China may be at great risk.