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After eight years of preparation and waiting, Ethereum (ETH) finally completed “The Merge” at 14:00 (UTC+8) on September 15th 2022. This merge can be said to be epic. The most important change in the merged Ethereum is the change of the consensus mechanism from PoW (Proof-of-work) to PoS (Proof-of-Stake). With the completion of the merge, Ethereum officially entered the 2.0 era.
CoinW , the world’s leading cryptocurrency trading platform , issued an announcement to support the ETH upgrade. Hard fork or new tokens will be generated and in order to reduce the transaction risk caused by the possible sharp fluctuations in market prices during the hard fork, and to ensure the safety of users’ assets, CoinW took a snapshot of the users who hold ETH in the platform as at 12:00 (UTC + 8), on September 15th 2022.
The merge promises to make ETH one of the greenest blockchain network in the world.
Regarding the impact of the ETH merger, the ETH Foundation said; “ The biggest advantage of the merger is that it will reduce the energy consumption of ETH . After enabling PoS , the energy cost of Ethereum node operation is about 2.62 MW /year, which is about 99.95 % lower than the previous energy consumption , which is expected to make ETH one of the most environmentally friendly financial systems in the world”..
In response to the question of whether there will be deflation after the merger of Ethereum , the ETH Foundation officially pointed out that the Ethereum under PoW is additionally issued in the form of block rewards, and the current annual inflation rate is about 4.3% ; ETH is additionally issued in the form of pledge rewards, and the annual inflation rate is estimated to be about 0.43% . Under certain conditions, the deflation of ETH is realized .
In addition, ETH officials emphasized that the merger is a change in the consensus mechanism, not an expansion of network capacity, nor will it reduce gas costs. After the merger, the transaction speed will not be significantly improved.
ETHW price depends on public chain ecology and community construction.
Just hours after Ethereum merged, a consortium of Ethereum’s miners launched ETHW ( ETHPoW ) in order to preserve the proof -of- work ( PoW ) mechanism that made them profitable . CoinW will distribute ETHW to eligible ETH holding users according to the previous ETH balance snapshot. After ETHW is distributed, users who hold it can freely trade in the existing ETHW market.
After the merger, ETHW soared to $60.68, and then fell all the way until it fell to a 7-day low of $ 4.2172 at 10:50 on the 19th ( UTC +8 ) , a total drop of more than 93 % , and it has not retraced to 5 Dollar.
The future development trend of ETHW, the CoinW Research Institute report pointed out that most of the core developers and mainstream applications of the Ethereum ecosystem currently do not support forked projects such as ETHW, but the mining pool wants to retain miners. Small and large mining pools are expected to support ETHW, such as F2Pool, Poolin , and BTC.com. In addition, many exchanges will launch ETHW one after another for the benefit of users. In the short term, ETHW has gained a certain amount of ecological support, and users who hold ETH can easily receive “candy”; from the perspective of price, ETHW will undoubtedly face huge selling pressure in the short term, and the price is in a constant bottom-seeking stage; in the long run, Whether the price of ETHW can achieve sustainable growth mainly depends on the public chain ecology and community construction.
For ETH2.0, it will be subject to a 90 % reduction in ETH production, an increase in PoS locked coins from the current 10 % to 30 % , and EIP-1559 burning coins, and the actual inflation will change from positive 2.0% to -1.8% , etc. Affected by favorable conditions, it has opened an unprecedented era of burning deflation. Then, with ETH as the leader, pioneering the next round of bull market started.
All in all, the ETH2.0 merger is not for short-term price speculation. For ETH, POS is a long-term benefit, reducing the uncertainty of the miner group. After the sell-off, there is a certain guarantee for the stability of the price. In the future, as the consensus of ETH continues to increase, it is not ruled out that institutions that previously held a large amount of BTC will also begin to allocate ETH. With the growth of external funds , the consensus will reach its peak , which may push the price of ETH to new highs.
