Here’s how the Ethereum (ETH) economics will be affected by the merger: Report

Vladislav Sobov
Web3 VC heavyweight Amber Group summed up some thoughts on the post-merger future of Ethereum (ETH) in terms of its economics
Contents

  • Here’s Who Will Benefit After Ethereum (ETH) Consolidation
  • Ethereum Classic (ETC) will not accept ETH hash power exit

The Amber Group, a VC conglomerate focused on investing in emerging crypto and Web3, has released a report covering the potential impacts that a migration to PoS could have on Ethereum (ETH) economic design.

Here’s Who Will Benefit After Ethereum (ETH) Consolidation

First of all, Amber Group experts tried to calculate the APY rate for Ethereum (ETH) “as if the merger happened today.” According to their estimates, ETH makers can receive up to 8.47% in APY to secure their fortunes in Beacon Chain mechanisms.

The miner’s extractable value or MEV (“miner tax”) will be drawn by auditors who will be able to suggest blocks in periods of increased volatility.

Also, MEV mining will be among the most influential post-merger centralization factors of Ethereum (ETH) along with opportunities for DoS mitigation. As of July 2022, the Ethereum PoS Beacon chain attribution appears to be highly centralized, with Lido Finance in control.

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According to U.Today in a recent guideline, Ethereum (ETH) is set to move to Proof of Stake (PoS) consensus from PoW in September 2022.

Ethereum Classic (ETC) will not accept ETH hash power exit

However, Ethereum (ETH) miners will either have to leave their business or move to another blockchain that uses the Ethash algorithm. Essentially, this could mean running into Ethereum Classic (ETC) mining. This trend has brought ETC back into the top 20 cryptocurrencies by market cap, as explained by U.Today.

However, some miners have indicated their support for a virtual Proof of Work (PoW) fork of legacy Ethereum (ETH). However, it is highly unlikely that Ethereum (ETH) DeFi and the stablecoin infrastructure will somehow continue to use Proof of Work.

The Amber Group representative also added that the existence of two Ethereum (ETH) ecosystems of tokens and applications would lead to major issues such as intellectual property rights.

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