Former DeFi Researcher Reveals What To Expect From Ethereum After ‘The Merge’
“The Merge” from Ethereum is one of the most anticipated events within the crypto community. As enthusiasts – both Ethereum proponents and non-proponents – await this crucial event, there are speculations on what the effects will be on the Ethereum network. A former DeFi researcher from Celsius has outlined some things to expect.
ETH inflation rate will drop from 0.22% to 4.3% post-merge
Defi researcher Vivek Raman, mentioned a few things the crypto community should expect on the Ethereum blockchain post-merge. One of which is that the fees on the Ethereum layer-1 network will not be reduced.
“Fees are a function of blockspace demand, NOT consensus mechanism,” he said, noting that even though The Merge will see the Ethereum blockchain transition from a PoW to a PoS consensus mechanism, the fees on ETH layer-1 will remain the same.
Raman further pointed out that the crypto community should not expect structural sell pressure from ETH issuance within 6 to 12 months after The Merge. This is because the rewards for staked ETH cannot be withdrawn until the network permits withdrawals which would not happen immediately.
He also mentioned that the inflation rate for the ETH asset after The Merge is likely to drop to 0.22% from the prevailing 4.3% rate. Raman further asked the crypto space to expect higher security on the Ethereum blockchain post-merge because ETH under the PoS mechanism would cost more to attack.
Raman noted an increase in ETH staking yield by 50% and better sustainability on the Ethereum blockchain than on the Bitcoin blockchain.
Crypto Winter rages on
The Merge is expected to launch in August of this year fully. The crypto community expects improvements have made the event the most awaited one in the space.
The Crypto Winter has not been kind to ETH as the asset has for some time been hitting lows only a few could expect. Market sentiment plays a crucial role in the price movements of crypto assets, and it is not farfetched to expect a positive response from the price of ETH when The Merge is rolled out with its plethora of benefits.
Lately, the Ethereum team rolled out the Gray Glacier network upgrade on 29 June, which adjusted the parameters of the Ice Age/Difficulty Bomb by pushing it back 700,000 blocks as a means to increase mining difficulty. As of press time, ETH trades at $1,526, with an 11% increase in the past seven days.