After the Ethereum network transitioned from a Proof-of-Work system (PoW) to a Proof-of-Stake system (PoS), high-balance Ethereum accounts saw a significant portion of their holdings go up for sale. Although investors interpret this move as a sign that hard days are ahead for Ethereum, analysts think that the situation is different.
According to the data published by On Chain research company Santiment, since September 15, when the Merge update was successful, the cumulative assets of accounts with a minimum of 1,000 and a maximum of 10,000 Ethereums have decreased by 2.24%, while the number of accounts with a minimum of 100 and a maximum of 1,000 Ethereum has been decreased by 1%. 41 dropped.
Even in Ethereum, which stands out with its high liquidity compared to other cryptocurrencies, the decline that occurred due to the inability to meet the sales worried investors. However, analysts indicated that it is highly likely that the assets already sold were purchased for speculation purposes. As the update approaches, balances with rapidly increasing momentum also seem to support analysts.
Ethereum (ETH) Supply Will Drop
According to data from ultrasonmoney today, post-Merge ETH annual token supply has dropped from 3.79% to 0.20%. Since the morning of September 15, Ethereum stopped being a PoW network and switched to a PoS consensus mechanism. The miners who secure the network are no longer needed, and nodes (validators) that stake 32 ETH will now receive rewards for their rewards. You can see the annual new issuance rate of ETH, ETHW and BTC after the merge from the chart below.
In addition to reducing energy use, Ethereum's daily token issuance has also dropped. Daily issued tokens are formerly issued to miners and now to nodes (verifiers). After the merge, the network minted 4,581.26 new Ethereums, which is 95% less in daily issuance than today's last month. So the ETH supply is now increasing 95% less. If there was no PoS transition on September 15, miners would have been given exactly 88,736.70 ETH.