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”.
Together with the London Upgrade — that happened one year before The Merge, in August 2021 — these changes can be seen in economic analysis, such as the price ETH would trade at if Ethereum reaches its all-time high market cap.
ETH tokenomics data since The Merge
Data retrieved by Finbold on September 15 from ultrasound.money shows that 980,541 ETH were burned in the 365 days since The Merge.
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.
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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