The ETH merger has been very successful, and currently there have been no flaws. Some reports suggest that this merger is equivalent to changing the engines of an aircraft in flight, which is both astonishing and appropriate
The ETH merger has been very successful, and currently there have been no flaws. Some reports suggest that this merger is equivalent to changing the engines of an aircraft in flight, which is both astonishing and appropriate. Imagine that Ethereum, such a huge ecosystem, has successfully merged with BeaconChain without any network interruption, and seamlessly transformed the underlying logic and consensus mechanism. But why does ETH plummet after the merger? Is it the best time to enter now?
This is a very common strategy in the financial market, which refers to when an event that can drive prices up is about to occur, that is, when there is an expectation of an increase, institutions will buy in large quantities to push prices up. However, once this event truly occurs, institutions will sell their chips.
Although this merger of Ethereum is difficult and everyone's expectations are very high, the fact is that it has not greatly improved the overall network performance of Ethereum. We can draw the following conclusions from two sets of data:
Will the Ethereum GAS fee decrease after the merger?
Not at present, but after the next phase of slicing technology is launched in the future, the transaction cost of Ethereum will drop significantly, but the next phase of slicing is expected to occur in 2023, so many people look at this merger as the prelude to the component slicing technology, which is the preparation for the future of slicing technology.
Another thing to note is that fragmentation may not be achieved at the beginning of 2023, because the merger of Ethereum was also postponed for a while, so it is unknown whether it will be able to go online for fragmentation at the beginning of 2023, which leads to Layer2, which we mentioned earlier. Because Ethereum's main network cannot reduce transaction costs in the short term, Layer2 is very important at present and can play a transitional role.
Will the transaction speed of Ethereum accelerate?
The answer is yes, but this improvement speed is so small that users can hardly notice it. If it was run under the previous POW mechanism, the speed of Ethereum blocks is 13-14 seconds per block, but after the POS mechanism is adopted, it can reach 12 seconds per block, so the change is very small, so this merger has not greatly improved and changed the overall performance of Ethereum.
The Ethereum merger took place on Thursday. On Tuesday, the United States Department of Labor released CPI data. If the higher the CPI is, the higher the inflation is. It is likely that the Federal Reserve will raise interest rates again to fight against inflation. Raising interest rates means that the economy is very inactive. The stock market was also very depressed last week or even last month, which triggered a large-scale selling off of the stock market.
The same is true in the field of Cryptocurrency. These are investment assets. From the perspective of both Ethereum technology and the macro economic environment, they are not optimistic. This has led to a slight upward trend in the price of Ethereum before the merger, but after the landing of the merger boot, it triggered a dive.
However, despite this. Ethereum still has great potential in the future.
Before this merger, the impact of Ethereum on environmental energy consumption has been criticized for a lot, but it successfully solved this problem after it was transferred to POS. This can gain a large number of investment institutions' favor, which is also very helpful for the long-term development of the entire Cryptocurrency industry.
Especially after switching to POS, ETH is likely to become a deflationary currency against inflation. The reduction of inflation is mainly due to the reduction of output. The previous number of Ethereum is unlimited, but once switched to POS, the supply of Ethereum will decline significantly.
Data source: ultrsound
Through the simulator on the Ultrasound website, it can be seen that after Merge, an additional 3518 ETHs have been issued, but before Merge, an additional 63633 ETHs are expected to be issued. Therefore, in terms of production, the growth rate of ETHs has slowed down. In this case, if there is a certain increase in the number of users and transaction volume of the entire network, ETH is highly likely to have deflationary properties,
Data source: ultrsound
According to the ultrasound data, the supply of Ethereum was the highest on the day of the merger. Before the merger, the supply of Ethereum had been on the rise. The dotted line behind was the expectation of the supply of ETH in the past two years. After the merger, the supply of Ethereum was on the downward trend. Once ETH became a deflationary currency, it would be very helpful for the price rise.
It is not difficult to see from the trend chart that although the ETH supply has shown an overall downward trend, it is very slow. It is difficult to return to Alltime high within at least two years, especially in the current bear market where this deflationary performance is not too obvious for the time being.
If you are optimistic about Ethereum ecology, have certain expectations for the future of Ethereum, and have a better understanding of various sectors of the ecology, such as smart contracts, DeFi, etc., then you can consider building a position in the bear market as a long-term investment, perhaps in 2025, there will be a huge growth and harvest.
In addition, although the rainbow chart is not very accurate, it can be used as a reference for the general trend. The more the rainbow chart moves towards the red warm color, the more Fomo foam will appear, and the more it moves towards the cold color, which means it can be bought. The above is not used as any investment advice.
Now Cryptocurrency is still in the wilderness era, and Ethereum is like a brave pioneer. Although the future is bright, the road is still winding.
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