Almost three months after The Merge, simulations of Ethereum (ETH) following the two consensus models are starting to gain relevance. So the data shows us that if the blockchain was still creating work, more than a million additional ETH would have been created.
With Ethereum PoW, there would be an extra million ETH
It’s been almost three months now since the Ethereum (ETH) Merger, which marks the shift from consensus-of-proof-of-work (PoW), to consensus-of-proof-of-stake (PoS). Apart from the technological prowess of this event, it is also good the creation of new ETH has been greatly reducedso much so that without it, these more than a million new units would have seen the light of day :
Figure 1 – Simulation of the evolution of the distribution in the PoW model
In a POW model, this would be approx $1.28 billion in money supply would be created. Projecting the data on an annual basis, this would equate to 3.06% inflation for 3.7 million new ETH.
But thanks to a change to the PoS consensus, that’s not the case. With the current state of the Ethereum blockchain, the network would even be deflationary taking data on a daily basis, ie -0.47% per year, and taking data neutral over 30 days:
Figure 2 – Evolution of ETH distribution since The Merge
It should be noted, however, that these figures are subject to change depending on demand on the network.
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To solicit the network on lows
Like its behavior for several months now, the Ethereum blockchain is at a particularly low solicitation level. Number of daily active addresses fell below 400,000which has not happened since the beginning of the 2021 bull run, with the exception of last June.
In the last 24 hours, this data represented approximately 380,000 addresses:
Figure 3 – The number of daily active addresses on the Ethereum blockchain
On the transaction fee side, the trend is dead calm as well. For many months, average transaction cost regularly drops below $2which has not been seen again since late 2020:
Figure 4 – Average transaction price since the end of 2020
To get a better understanding of the trend curve, you have to zoom in a bit when looking at the data since November 2021 was the all-time high rate (ATH) for cryptocurrencies. In fact, with the exception of a statistical distortion at Yuga Labs’ Otherside metaverse land sale launch last spring, transaction fees on the Ethereum blockchain are getting lower and lower:
Figure 4 – Average transaction price from record high
Despite the gloom in prices, we can still play the hope card, arguing that transaction fees are such low They are an opportunity to move their addresses easier than in times of high activity.
👉 Also read – Ethereum (ETH): Ropsten testnet will close definitively in December
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Source: Ultra Sound Money, Etherscan
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