Ethereum gas consumption has dropped by 99.99% since The Merge, turning the network into a more environmentally friendly platform.
One year after the major upgrade known as The Merge, which transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus, Ethereum has made significant improvements, including a record decrease in gas consumption.
According to data from Glassnode Alerts, Ethereum’s daily energy consumption has decreased by 99.9% since The Merge.
Furthermore, gas fees on the Ethereum network have been alleviated despite the recent SocialFi hype. Previously, gas fees would skyrocket due to increased network activity. This optimization in gas fees could be attributed to the development of Layer-2 scaling solutions, which is one of the notable advancements this year.
However, many argue that the decline in gas usage demand in recent weeks can be attributed to the poor performance of NFTs and the waning trend of memes. As a result of the price drop, Ethereum has become deflationary. Over 300,000 ETH has been burned, resulting in an annual deflation rate of 0.25%.
What to Expect from the Dencun Upgrade?
Following The Merge, the Ethereum community is now looking forward to the next major upgrade, Dencun, expected to be released by the end of 2023. During the All Core Devs meeting on September 15, which is a monthly gathering of Ethereum developers, various core areas were discussed, including the Ethereum Improvement Proposals (EIPs) for the upcoming Dencun upgrade.
According to the meeting minutes, one of the key points of the next upgrade is EIP-4844, which aims to enhance the network’s security and scalability.
Currently, clients such as Prysm, Besu, and Geth are undergoing Devnet-8. EIP-4844 introduces “blob-transaction,” a new transaction format that facilitates gas fee optimization through the process of carrying transactions between Layer-1 and Layer-2 in blob format.
Although The Merge was expected to allow the withdrawal of staked ETH, it has actually attracted more participants to Ethereum staking. As of August 31, over $20 billion worth of ETH has been staked, with Lido Finance accounting for 32.4% of all staked Ethereum.
However, Lido’s dominance raises concerns about centralization. That’s why the Ethereum team discussed the implementation of EIP-7514. Tim Beiko, Ethereum Protocol Developer, stated that the recent discussion revolved around “whether to add a constant cap to the validator activation queue,” which led to the formalization of EIP-7514.
EIP-7514 is particularly important to mitigate risks when Dencun is launched. This proposal aims to address the centralization risk associated with liquid staking by limiting the number of validators added to the network per epoch to 8.
The Dencun upgrade will overall enhance the efficiency of Ethereum behind the scenes, preparing it for future improvements, such as the introduction of a new data organization method called SSZ, which will make Ethereum safer, more efficient, and run even better.
The FTX Hangover Continues
Prior to the implementation of Dencun, there are concerns about the upcoming FTX token sale. Last week, Judge John Dorsey approved the bankrupt entity’s proposal to liquidate its crypto assets. FTX plans to sell billions of dollars’ worth of crypto assets without prior notice to the public.
FTX still holds a substantial amount of assets, and it appears that they will be entering the market.
As reported, FTX intends to sell billions of dollars’ worth of crypto assets that it owns in order to raise funds for creditor repayment. The deadline for approval of this plan was September 13, 2023. The company’s holdings include $192 million worth of Ethereum, as well as other Category A cryptocurrencies such as Solana ($1.162 billion) and Bitcoin ($560 million).
FTX also holds approximately $900 million in Category B tokens, which have low liquidity. These tokens include prominent names like Serum (SRM), Blur (BLUR), Polkastarter (POLS), Maps.me (MAPS), Oxygen (OXY), and Bonfida (FIDA).