With gas fees exploding and Ethereum capable of processing just 15 transactions per second, the network’s promise as a new mass-market technology seemed far-fetched, to say the least. Many piggybacked on Ethereum’s blockchain network even as upstarts such as Solana, Cardano, Polkadot and others challenged the network’s supremacy. Numerous DeFi protocols hit the market in 2021 in tandem with the birth of nonfungible tokens, NFTs, which caught fire with celebrities and became crypto s first genuine pop culture phenomenon. Yet even as Bitcoin emerged as a market phenomenon and drew legions of new investors and exceeded $1T in market capitalization, Ethereum plotted its own course. The project recovered and ETH tracked Bitcoin for the next few years right through the bull run that started in April 2020. ETH hovered around $1 for the rest of the year before breaking the $20 mark in 2016, right before the infamous DAO Hack. Ethereum hit mainnet in July 2015 as a project known to only a small circle of crypto geeks. “I think the event itself will be more unremarkable for the retail user than expected,” Foobar, a well-known Ethereum developer, told The Defiant. The Merge, it bears saying, is not designed to make Ethereum faster in terms of transaction speed, or cheaper to use. The token may fall sharply after the event, especially if it’s deemed to be inconsequential. There’s also a question of whether the Merge will be a “ sell the news” event as traders have piled into the derivatives market for ETH. Then there is the danger of liquid staking protocols like Lido controlling too much ETH. There’s a debate of how high staking yields are going to be after The Merge. More Than 70% Of Stakers Are Currently Nursing Losses The Defiant That’s not only bad for the planet, it’s expensive. Bitcoin is eating about the same amount of power as Pakistan on an annual basis, according to the Cambridge Bitcoin Electricity Consumption Index. It relies on mining outfits to process and add blocks of data to the chain as fast as possible, a race that consumes mammoth amounts of electricity. Since its inception, Ethereum has used the same method Bitcoin does to maintain its blockchain - Proof-of-Work (PoW). Ethereum developers have been painstakingly preparing for this moment for months with a series of tests. The Merge will take place when Ethereum’s Beacon Chain, an experimental network predicated on Proof-of-Stake processes, fuses with Ethereum’s old school mainnet. What is certain is that crypto investors and users will confront a raft of new developments that may shape the future of the space for years to come. If The Merge is as profound as everyone seems to believe then everything should be about to change for the better, right? And DeFi, in the grip of a bear market and tarnished by ceaseless exploits and the meltdown of Terra’s ecosystem in May, could surely use a feel-good story. Ethereum, after all, is the backbone of the decentralized finance proposition. What may be lost amid the hoopla is how The Merge will impact DeFi. Mainstream media have been running segments on The Merge, searches for the event are trending at an all-time high, and Google has set up an online countdown clock. Yet he’s not the only skeptic who believes the hype has gotten a bit out of control. Not the Only SkepticĬraib may be part of a minority in DeFi this week as the countdown to The Merge ticks down to zero-hour on Thursday. He said he’s sold all his ETH, which he had bought at $0.26 per token in the Ethereum crowdsale in 2014. “I’m not really paying attention to The Merge,” the founder of the blockchain-based hedge fund Numerai told The Defiant in a DM. And the DeFi community is giddy with anticipation that the shift to Proof-of-Stake consensus will revitalize the blockchain network’s usefulness and value. Ethereum is poised to execute the most historic upgrade in its eight-year history.
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