After years of waiting, the Ethereum merger will finally come to fruition and will have a major impact on both individual and institutional cryptocurrency investors.
Here’s what you should know:
what’s going on? The formal integration is scheduled for Wednesday, September 14th, and will update the way Ethereum processes transactions, removing the need for energy-hungry computer hardware. Instead, participants, known as validators, post their holdings of Ethereum’s native asset, Ether, as collateral for the right to add transactions to the blockchain. In industry terms, this means the platform will move away from the proof-of-work mechanism popularized by Bitcoin.
It’s also important to remember that this migration is not a recent development. Moving from PoW to PoS has always been a goal of the Ethereum community, so this shouldn’t be seen as a surprising change.
Staking details. Staking creates an opportunity to earn passive income from your holdings. The exact rate depends on several factors, such as whether the owner runs his own validators or uses certain third-party his services, such as exchanges, but on average it averages about 4%. Investors can use the same popular crypto exchanges such as Coinbase, Kraken and Binance. These offerings are useful, but remember to read the fine print.
Each platform charges its own fees and customers receive a net reward. Some have different lockup periods and staked Ether may not be recoverable for weeks or months.There are also independent staking services, the most famous being Lido. The platform has gained a foothold in the market by issuing a liquid token stETH to depositors, which is 1:1 redeemable for he ETH once the lockup period ends about 6 months after the integration.
PoW Ethereum may live. Given that it costs millions or even billions of dollars to mine a blockchain and make a profit, some miners are upset about the move to PoS, and are tempted to merge. We plan to continue mining Ethereum after this. This project he called ETHPoW. Such plans are possible because, like all public blockchains, Ethereum is completely open source. This fact means that anyone can copy and modify the code as they like.
From an investor’s perspective, there are a few things to keep in mind. First, anyone holding Ether at the time of the merge will be entitled to receive ETHPoW tokens and tokens of the fork or debate (there may be many). However, while investors holding assets directly in non-custodial devices such as hardware wallets will receive their assets immediately, it may take some time for popular exchanges to distribute those funds. Finally, we still don’t know if these new tokens are worth it. Their value depends on a number of factors, including their level of use and development on the network, as well as where they are listed.
With the majority of Ethereum developers supporting this integration, ETHPoW proponents will face a difficult situation. For reference, Ethereum’s most famous fork, Ethereum Classic, currently has a market cap of $5.2 billion. By comparison, Ethereum has a cap of $210 billion.
Ethereum competitors are in the spotlight. Key selling points of prominent Ethereum competitors such as Solana
When that happens, Ethereum’s major competitors may need to find additional points of differentiation. Otherwise, you risk losing mindshare, developer activity, users, and the value stored on Ethereum. If this happens, it could adversely affect the price of tokens on those platforms. In fact, there is not only excitement about increasing use cases for multi-purpose blockchains such as Ethereum in areas such as decentralized finance, non-fungible tokens, gaming and decentralized autonomous organizations, but also the hype for integration, with Ethereum Some are predicting where it will flip. Market capitalization will exceed Bitcoin ($415.78 billion).
The Ethereum merger took a long time. The impact from this event will be felt for years to come and will demand attention from users of all walks of life.