<p dir="ltr">After a long wait for the historical event widely known as “The Merge”, at approximately 6:42 AM UTC, September 15th, 2022, the Ethereum blockchain officially dropped Proof of Work (PoW) and adopt Proof of Stake (PoS) as its new consensus protocol. A week after this transition took place, how practically The Merge has changed the blockchain industry, as well as the cryptocurrency market is the most sought-after topic. Some are skeptical about the effectiveness of this upgrade from the very beginning, however, the rest expects that The Merge will bring a boost to their portfolio’s returns. Let’s find out how The Merge has affected the market since its launch on <a href="https://www.builder.news/" alt="builder.news" title="builder.news " target="_blank" rel="" class="">Builder.news</a>.</p><h2><strong>The Merge and after stories</strong></h2><h3><strong>The Merge's Watch Party</strong></h3><p dir="ltr">The Merge was undoubtedly a spectacle for Ethereum advocates. The Ethereum development team successfully pulled off a feat few could achieve. They modified the root of a global infrastructure while it is still running, without anyone noticing. It happened as smoothly as it possibly could, with no bad actors, no anomaly. The Merge’s Watch Party on YouTube, at one time, acquired more than 40,000 live audiences. It was a celebration not just for the stakeholders of Ethereum alone but also for all of Web3's stakeholders.&nbsp;</p><iframe width="560" height="315" src="https://www.youtube.com/embed/Nx-jYgI0QVI?start=10730" frameborder="0" allowfullscreen=""></iframe><p class="prosemirror-p-center"></p><p class="prosemirror-p-center"><em>Ethereum Mainnet Merge Viewing Party (Source: YouTube)</em></p><h3><strong>Market reaction after The Merge</strong></h3><p dir="ltr">In contrast to the joy of the Ethereum community, the whole crypto market responded with a steep value drop not long after the big event. Anxiety surfaced after the viral spread of a<a href="https://www.wsj.com/articles/ethers-new-staking-model-could-draw-sec-attention-11663266224" alt="Ethers new staking model could draw sec" title="Ethers new staking model could draw SEC attention" target="_blank" rel="nofollow" class=""> WSJ article</a> stating that Ethereum’s move from PoW to PoS could trigger securities law. Reflecting on Ethereum’s new Staking mechanism, SEC Chairman Gary Gensler, one day after The Merge, said that “From the coin’s (Ether’s) perspective… that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others.” The Howey Test is a set of parameters examining a financial instrument whether by using it, investors expect to earn a return from the work of third parties or not. If the instrument passes the test, it would be considered a security and must be regulated according to securities law.</p><p dir="ltr">ETH price plummeted by almost 10% shortly after the statement was made public. After one week, ETH price has dropped almost 20% from around $1500-$1600 pre-merge to an average of about $1250 at the time of writing. Other coins and tokens were also affected.</p><blockquote class=""><p class="prosemirror-p-left">From the coin’s perspective… that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others.</p></blockquote><p dir="ltr">With the FED increasing interest rates by another 0.75% on Sep 21st, highest since 2007, it is unlikely to see the end of the bear market, as well as any uptrend from ETH in the near future.</p><p dir="ltr"><em><strong>&gt;&gt;&gt;See more:</strong></em><a href="https://www.builder.news/crypto-insights/how-the-merge-affects-investors-etIkc" alt="how-the-merge-affects-investors" title="How the merge affects investors" target="_blank" rel="" class=""><em><strong> How the merge affects investors</strong></em></a></p><h3><strong>ETH supply since The Merge</strong></h3><p dir="ltr">In addition, for almost 21 hours after The Merge, for the first time, ETH supply rate fell below ETH burn rate and ETH was in deflation mode. However, it soon flipped and entered inflation again. This was partly due to low activities on the Ethereum network, making average gas fees lower than 15 gwei, the rate at which more ETH are burnt than created.&nbsp;</p><p class="prosemirror-p-center"><strong><img src="https://lh4.googleusercontent.com/JuudpaClmqBW3B-pKEE1XbiJiavOsbg50uy6RVU8O58j-o31sbHODSdMuEcyH7xE6tZnb38lqUT-K9QviXbr6WxA4JLbTHGJNUPCYL-9Eh6BL2v0Z2O5mLLCk97s5odZIlKhsviZwgqal9HtZWtqdAroeqmgpCn1eGcbV_EOaTAwRzE4a-hIB_wqEw" alt="ETH supply since merge" title="ETH Supply since merge" width="600" height="341"></strong></p><p class="prosemirror-p-center"><em>(Source: ultrasound.money)</em></p><p dir="ltr">Nonetheless, it is essential to note that after The Merge, ETH inflation rate is significantly lower than it was in PoW. With the current gas fee structure, ETH is much more likely to be deflationary than inflationary in the long run, which means that each ETH will theoretically be more valuable in the future.</p><p dir="ltr"><em><strong>&gt;&gt;&gt;See more:</strong></em><a href="https://www.builder.news/crypto-insights/ethereum-landscape-post-the-merge-hLhTq" alt="Ethereum landscape post the merge" title="Deep analysis of Ethereum ecosystem after merge" target="_blank" rel="" class=""><em><strong> Deep analysis of ETH ecosystem after merge</strong></em></a></p><h3><strong>Ethereum became more sustainable after The Merge</strong></h3><p dir="ltr"><a href="https://www.builder.news/crypto-insights/the-merge-a-pivotal-event-for-ethereum" alt="The Merge: A pivotal event for Ethereum" title="The Merge: A pivotal event for Ethereum" target="_blank" rel="" class="">The Merge</a> was but one milestone within a long-term roadmap to make Ethereum more scalable, more secure, and more sustainable. It successfully cut 99% of Ethereum Network’s overall energy consumption as powerful computers are no longer needed to run the infrastructure. Many believe that this also reduces the world’s energy usage by 0.2%. Hence, much much more energy efficient. However, this was slightly deferred by the fact that a number of the original ETH miners have switched to other PoW networks, including the original ETH PoW Fork since The Merge.</p><h3><strong>Is Ethereum more decentralized after The Merge?</strong></h3><p dir="ltr">Did Ethereum become more decentralized after The Merge? That remains to be seen. A report by<a href="https://finbold.com/only-2-addresses-control-46-of-all-ethereums-pos-nodes-for-processing-transactions-post-merge/" alt="Finbold only 2 addresses control 46 of all PoS nodes" title="Finbold only 2 addresses control 46 of all PoS nodes" target="_blank" rel="nofollow" class=""> Finbold</a> found that, of all nodes that have been verifying transactions on Ethereum after the merge, 46% belong to only 2 organizations, Coinbase and Lido. This news is upsetting, but moving to PoS also means that users no longer need to invest in expensive mining machines to verify transactions and earn fees. In the long run, with the right incentives, more individuals will be able to join and become verifiable nodes, decentralizing the network further.</p><p class="prosemirror-p-center"><img src="https://lh5.googleusercontent.com/FChNslPOBjsC870PAqJRtnpPMg3jua-GNnoJSEd0mnAVNbY0nEKbL2pEPk0n_DkNsJktzTOUi1FKw-l16SvP54PAzNx2iBZF3m_nsdzZINteNo_w-kkRbOe7k7f1ZgqpYTQWdywDOa6HrH3KmcDCYIs8zTz5pbGKMopTNwnvtNo0wgeHY17FmtQl0A" alt="ETH staking pool distribution" title="ETH Staking Pool Distribution" width="600" height="451"></p><p class="prosemirror-p-center"><em>(Source: Coindesk)</em></p><h2><strong>When Lambo?</strong></h2><p dir="ltr">In conclusion, after one week, The Merge delivered exactly what it promised: a more sustainable Ethereum. Those who expected a big ETH price pump post Merge had good reasons to be disappointed after such a successful event. But as Ethereum is becoming more scalable and secured with these upgrades, ETH’s value is bound to rise. The question is when? As Vitalik Buterin, the mastermind behind Ethereum, stated back in July, after the Merge comes the Surge, the Verge, the Purge, and the Splurge. We are currently post-Merge. Therefore, we will be anticipating the Surge.</p><p dir="ltr"><a href="https://www.builder.news/crypto-insights/the-surge-Bx7A3" alt="The Surge: Ethereum Scalability Booster" title="The Surge: Ethereum Scalability Booster" target="_blank" rel="" class="">The Surge</a> likely points to the time period following Sharding. Sharding is the last of the three main components, integrated in chronological order, that comprise the Ethereum Upgrades. We have completed The Beacon Chain and The Merge, and now we will be observing the Sharding. Sharding essentially means different methods to split the Ethereum blockchain into smaller, mini blockchains that require less effort to verify along with a series of technical improvements that will make Ethereum much more scalable and secured. This translates to a lower gas fee, faster transaction processing speed, and overall more decentralized.&nbsp;</p><p dir="ltr">The later time periods, The Verge, the Purge, and the “Splurge” refer to more distant, <a href="https://www.builder.news/crypto-insights/what-comes-next-after-the-merge" alt="what-comes-next-after-the-merge" title="What comes next after the merge" target="_blank" rel="" class="">long-term upgrades</a> to keep Ethereum on track with its mission to <strong>grow until it is powerful enough to help all of humanity</strong>, to realize its vision of<em> a digital future on a global scale.</em></p><h2>Last words</h2><p dir="ltr">We have reasons to be hopeful for the future of Ethereum. The market has plunged multiple times, yet key players in the Ethereum Ecosystem including developers, investors, and community members have shown no signs of exhaustion. The Ethereum team is still widely regarded as the leading innovator in the blockchain sphere, responsible for building the foundations of Web3.&nbsp;</p><p dir="ltr">With the transition to Proof of Stake, regulators will observe Ethereum more closely than before. A future without such scrutiny, however, is impractical. There is hope that, as long as their intention remains centered around bringing value to all of humanity, they will never cease to be relevant.</p><div class="pr-block-special"><strong>Disclaimer</strong><br>This article is intended for reference purposes only. The information provided does not constitute advice or recommendations that any investment or trading strategy is suitable for any specific name.</div><p></p>

Let's join Builder.news in our journey to recount notable stories one week following the successful Ethereum Merge.

One week after The Merge: Does it meet market expectations?