Defi Economy Looking Forward to Ethereum Merge

Curiosity is brewing with the coming of Ethereum “Merge.” Will Ethereum trigger DeFi 2022? The coming of the Merge can be a “make or break” deal for the blockchain.  The vision of Ethereum was about providing for a scalable, secure, and sustainable network. The merge means the coming of Ethereum 2.0.

The Merge is expected to be up in Q2; however, the Merge roadmap shows that there will be a post merge clean up providing for extra features. The coming of the Merge means it is a successful switch over for Ethereum PoW to PoS. The coming of the Beacon Chain will make Ethereum mining obsolete.

PoS and Climate benefits has been gaining lot of attention. Ethereum 2.0 is expected to bring down the carbon emissions to 0.07 kilograms per transaction, thus making it more efficient than Bitcoin and is expected to become the favorite of green lovers.

In the POW model, miners validate transactions on the network solving math problems; however, with the coming of the POS users will be pledging their tokens to use it for verification.  And, with PoS validators get rewarded with more tokens when the transaction is complete.

• The rewards, which once went to miners will now go to stakers
• Staking yields of 10% to 15% becomes a passive source of income
• Thus, retail investors will be able to deal with inflation
• When stops the supply of ETH is expected to decline eventually leading to scarcity
• Eventually, ETH can become a store of value (SOV)
• Dramatic lowering of the carbon footprint is the major plus with Merge in turn attracting green

Short-term price increase of Ethereum is sought after; however, the overall impact of merge in the DeFi ecosystem and how it will unfold is something we need to wait and see.  Altcoins which are correlated to Ethereum will be looked at as bullish.  The more they stake the more power to validate.

Mark Cuban previously stated that he loved smart contracts and the collections of code, which run on the blockchain to execute agreements. This he stated as being one of the reasons for why he loves the blockchain technology.

Cuban stated, “Smart contracts came along, and that created DeFi [or decentralized finance] and NFTs [or non-fungible tokens].”

Lot of good things are on the dice with the coming of Merge. The coming of PoS will kick start the supply-demand dynamics for ETH, eventually driving more traffic. And, substantial interest in the asset. Many of them believe that Ethereum is undervalued and they hope for the price to better with the coming of the Merge.