Nearly three months after The Merge, simulations of Ethereum (ETH) following the two consensus models are starting to gain relevance. The data thus shows us that if the blockchain had remained at proof of work, more than a million additional ETH would have been created.
With an Ethereum PoW, there would be an additional million ETH
It has now been nearly three months since the Ethereum (ETH) Merge took place, marking the shift from consensus-by-proof-of-work (PoW), to consensus-by-proof-of-stake (PoS). Beyond the technological prowess represented by this event, it also greatly reduced the creation of new ETHso much so that without it, these are more than a million new units that would have seen the light of day :
Figure 1 – Simulation of the evolution of the distribution in a PoW model
In a PoW model, this would therefore be approximately $1.28 billion in money supply that would have been created. Projecting the data on a yearly basis, this would equate to 3.06% inflation for 3.7 million new ETH.
But thanks to a shift to 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, i.e. -0.47% per year, and neutral taking data 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 the demand on the network.
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A solicitation of the network on lows
Like its behavior for several months now, the Ethereum blockchain is at a particularly low level of solicitation. The number of daily active addresses fell below 400,000which hadn’t happened since the beginning of the 2021 bull run, with one exception last June.
Over the last 24 hours, this data amounted to approximately 380,000 addresses:
Figure 3 – Number of daily active addresses on the Ethereum blockchain
On the transaction fee side, the trend is also dead calm. For many months, the average cost of a transaction regularly falls below $2which again had not been seen since the end of 2020:
Figure 4 – Average price of a transaction since the end of 2020
To better appreciate the trend curve, you have to zoom in a little while observing the data since the last all-time high (ATH) for cryptocurrencies in November 2021. Indeed, with the exception of a statistical aberration at the launch of Yuga Labs’ Otherside metaverse land sale last spring, transaction fees on the Ethereum blockchain are getting lower and lower:
Figure 4 – Average price of a transaction since the last all-time high
Despite the gloom in prices, we can still play the card of optimism, arguing that such low transaction fees are an opportunity to make moves on their addresses more easily than in times of high activity.
👉 Read also – Ethereum (ETH): the Ropsten testnet will close definitively in December
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Source: Ultra Sound Money, Etherscan
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