The price of ETH has significantly increased last week. The rise in value was in response to the published notes from the last developer’s meeting. The meeting hinted at the timing of its highly awaited upgrade dubbed The Merge. For the uninitiated, ‘The Merge’ is a series of upgrades being implemented on the Ethereum blockchain. Majorly the Ethereum blockchain is transitioning from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism.
Network’s security, energy consumption and tokenomics will change as a result of the upgrade. Staking will play an important role in this. Moreover, there are going to be no more mining rewards following the transition to PoS. Hence, the ETH emissions will decline significantly. Meanwhile 10% supply is already locked on the staking contract.
As of July 21, Etherscan revealed 13,347 ETH were added to the current supply. The daily net result will be negative if mining Block rewards and the Staking rewards are removed. It means in comparison to the rewards more ETH will be rewarded. As a result, the total supply of ETH will be reduced.
As an investor, individuals can leverage this shift by following the given below strategies. Note that we are claiming any kinds of profits and investors are advised to practice caution.
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Through The Purchase Of ETH
There will come a short period when the supply of ETH will continue to rise before the launch of “The Merge.” It will likely become deflationary after that. The price of ETH is likely to increase once the demand of the second largest cryptocurrency increases.
Through The liquid staked ETH
Investors can earn an extra 2-3% return if they buy the staked version of ETH. Moreover, the acquiring interest will be bonus after the transition to PoS on the Ethereum Blockchain. However, the deployment of the unstaking is not scheduled yet but it is likely to happen in 6-12 months after “The Merge.”
Source: https://www.thecoinrepublic.com/2022/07/31/heres-how-you-can-leverage-the-merge-upgrade-as-an-investor/