The main problem with Ethereum that limits the growth of network usage is its low throughput.The situation is intended to be corrected by the transition from the algorithmproof of work (pow) to proof of stake (pos). Since a test network on pos has been developing in parallel with the current chain for a long time, “moving” to a new algorithm is called a merge.
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Ethereum was the first full blockchain withsupport for smart contracts, so until 2021 it was the absolute dominant in the NFT and DeFi markets. However, with the growth of network usage, the load grew and, along with it, the fees, since the throughput does not exceed 20 transactions per second. Users are forced to pay “tips” to miners so that their transaction gets into the block as soon as possible. On sale days for popular collections or during DeFi hype, the average commission was over $50.
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The high cost of use has led to increased demand for competitive networks. Because of this, the share of Ethereum in the DeFi sector has decreased from 96% in January 2021 to the current 58%.
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Ethereum needs faster and cheapersolutions to maintain leadership among altcoins. Vitalik Buterin opted for pos, as the "environmental burden" is significantly reduced, and long-term reliability is higher. The latter is achieved both due to the growth of decentralization (there is no need for powerful equipment), and due to the risk of loss of funds by attackers during a 51% attack (when it is detected, the protocol destroys the used ETH).
The question was raised only by the timing of the merger, sincethe time of the actual move is continually delayed. However, more and more specific dates have been named lately, and the developer Tim Beiko suggested last Friday as a preliminary day of September 19th. In a few days, Ethereum has grown stronger against Bitcoin by 17%.
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Optimism also embraced the Lido token, whichhas almost doubled in recent days. The Lido platform introduces staking in Ethereum 2.0 (pos branch) and currently provides about a third of all frozen assets ($6.3 billion out of $19.4 billion).
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However, optimism may be premature:September 19 is a preliminary and non-binding date, and the dates of the move have been repeatedly postponed. Several major tests are planned for August, after which the development team may announce a final date. Ethereum fans should keep their finger on the pulse!
Analytical group StormGain
(platform for trading, exchanging and storing cryptocurrency)
