The entire crypto industry is awaiting the Ethereum Merge with bated breath. Established in July 2015, Ethereum has long been leading the industry with Bitcoin as the most popular digital assets. Being the progenitor of smart contracts, Ethereum essentially enabled the creation of decentralized applications (DApps). This has brought about innumerable innovations to the market, most notably finance-related features like staking, lending, borrowing, yield farming, and liquidity mining. Despite having paved the way for such innovations in the crypto market, Ethereum has always been running on the basic Proof-of-Work consensus algorithm similar to Bitcoin. With the Ethereum Merge taking place however, the Ethereum blockchain will finally adopt Proof-of-Stake, which is essentially a consensus algorithm it helped create in the first place.
Because of its large user community, there are many staking projects developed for Ethereum – such as ORBS (ERC20) and CENNZ which are supported by Moonstake – so that its users can enjoy the benefits of staking despite ETH coin itself not being directly stake-able. Now, with this milestone upgrade to the network, users can finally stake ETH coin. And just like smart contracts before, there will undoubtedly be very exciting and interesting developments to expect for the crypto market as a whole. In this article, let’s look at how the Ethereum Merge will impact staking users, aka you!
Post-Merge Network Operations – An Everyday User’s Perspective
The most obvious benefit brought about by The Merge is that you will be able to earn by directly staking ETH. Since it is a well-established coin with a massive community, the APY should be relatively stable as it fluctuates based on supply and demand. Furthermore, as a user, you can earn by becoming a validator for the Ethereum network. The new Ethereum PoS system allows users who have staked at least 32 ETH to be randomly selected as a validator and the more you stake, the more likely you are to be chosen. So there will be more opportunities to earn from your ETH assets thanks to the upgrade.
In regards to network fees and transaction speed, it is reported that The Merge will not immediately improve these aspects, but there are plans on Ethereum’s roadmap to address these issues. Specifically, Ethereum plans to implement danksharding in 2023 to simplify block production and significantly increase throughput which should help reduce network fees.
The Big Picture: How The Ethereum Merge Will Change The Industry
Beyond the practical, everyday impact on the average crypto user, the Ethereum Merge is poised to shake up the crypto industry in major ways. One of the biggest benefits of upgrading the network according to Ethereum is a 99.95% reduction in the network’s energy consumption. Environmental impact has always been one of the biggest arguments against crypto adoption cited by opponents of the industry. This is why blockchain projects such as NEAR, Polygon, etc. have been positioning themselves as “carbon-neutral” solutions for the market. Now, with Ethereum itself finally addressing this issue, mainstream sentiment toward cryptocurrency as a whole will undoubtedly improve, which of course can lead to increased mainstream adoption by users.
Furthermore, The Merge will also change how traditional companies look at Ethereum. Of course, the throughput and performance upgrades brought about by the shift to PoS will make Ethereum more viable for larger-scale adoption by enterprises. Most importantly, however, it can be seen as undeniable proof that major, core infrastructural changes – be it from PoW to PoS, or even from legacy traditional systems to blockchain-powered ones, for a long-established system are 100% possible and can reap massive benefits. This can lead to increased enterprise interest in Ethereum and blockchain/crypto as a whole, and eventually, hopefully, large-scale business adoption that will result in further growth for the market.
Regardless of the unpredictable market prices, there is much to gain from the Ethereum Merge in both the short and long term. More opportunities for developers and investors alike, improved user experience, enhanced network performance and security, and a brighter future for crypto and blockchain adoption as a whole.
Recently, a team of Ethereum users who oppose the network’s migration to Proof-of-Stake, has announced plans for an official hard fork soon after the Ethereum Merge to preserve the original Proof-of-Work Ethereum (ETHW). This means that there will potentially be two ETH coins that exist on the market, ETHW by the EthereumPoW team and the new Proof-of-Stake ETH by the Ethereum Foundation. As a leading staking provider, Moonstake will work hard to support the new PoS Ethereum, and we will also closely monitor the growth of ETHW to provide support for the demand of our users. Please stay tuned for our official announcements and don’t forget to follow Moonstake on Twitter for all the latest quick updates and exclusive reward programs!