Few weeks ago, Ethereum’s testnet “Kiln” merged.
The community seems thrilled about the so-called Merge, but what’s “The Merge” exactly?
In a nutshell, it’s just an Ethereum upgrade.
Until now, miners were validating transactions by accumulating computing power to be the fastest to find the nonce of the block (Proof of Work).
When the Merge occurs, no more miners but validators who put at stake 32 $ETH will be randomly selected to secure the network. (Proof of Stake)
The Merge is just the name given to the transition of the Ethereum network from Proof of Work to Proof of Stake - By the way, it should occur between June and September 2022.
🚀 What are the consequences?
‼️ But there’s one interesting thing that no one talks about:
No newly minted Ether will enter circulation between the Merge (June-September) and Shanghai - This is the name of the first Ethereum upgrade post-merge around December.
Why? ETH issuance post-merge will only go to the stakers, whose withdrawals are blocked until the end of the year!
Are we going to experience a liquidity squeeze during this timeframe? When are all those events going to be priced in?
⤴️ Eth price has already increased by 10% since its testnet merged.
Maybe it has already begun...