One year ago, on September 15, Ethereum (ETH) went through a major update that changed the Ethereum Network in its roots by ultimately moving from a Proof of Work (PoW) to a Proof of Stake (PoS) system.
This update was called ‘The Merge’, as it merged the Beacon Chain with Ethereum’s mainnet, resulting in the Ethereum 2.0 network, which is 99% less costly to keep than the old network with massive consumption of energy and electronic device waste.
With a lower maintenance cost for validators, The Merge also decreased validators’ block rewards from supply inflation, dramatically impacting ETH’s tokenomics for what enthusiasts started calling “ultra-sound money”.
Ethereum economic data since The Merge. Source: ultrasound.money
Moreover, as only 680,724 ETH were issued through validators’ block subsidy, Ethereum’s circulating supply decreased by close to 300,000 ETH in the period. Resulting in a 0.25% deflation due to the mentioned updates.
Ethereum price analysis
Meanwhile, Ethereum is trading at $1,622 by press time. With approximately 10% in yearly gains after The Merge on September 15, 2022.
ETH 1-year price chart. Source: Finbold
This positive outcome for Ethereum comes amid a mostly bearish sentiment in the cryptocurrency market in the last year, which makes many analysts believe that crypto investors are yet to see the long-term effects of The Merge for the second largest crypto by market cap.
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