<p>Since its inception, ethereum has remained a shining beacon in the blockchain industry, being one of the major chains to gain mass appeal after bitcoin. It has brought innovations such as the concept of a programmable blockchain, allowing developers to build a wide range of decentralised applications on its network. Ethereum remains the second-largest decentralised blockchain and enables the development of smart contracts and decentralized applications (dapps).</p><p>In its journey, ethereum has used an iterative approach to bring about updates and features slowly but steadily moving forward with its roadmap to build the future of web3. It has undergone several upgrades and hard forks to improve scalability, security, and functionality. However, ethereum has faced challenges, particularly with scalability, high gas fees and sustainability. Hence, the move to a new chapter the merge.</p><p>The merge represents a significant milestone in ethereums journey. It culminated ethereums transition from a proof-of-work (pow) consensus mechanism to a proof-of-stake (pos) mechanism. This drastically improved and reduced energy consumption and brought forth a plethora of developments which will be the topic of discussion in this piece.</p><h2><strong style="-webkit-font-smoothing:antialiased;box-sizing:border-box;position:relative;text-size-adjust:100%;">The Ethereum Merge: A Year in Review</strong></h2><p>To change the engine of a car while its running is an apt metaphor to describe the sheer scale and complexity of this undertaking. The merge faced many delays and challenges and finally, on september 15, 2022, it was completed. Possibly the largest open-source coordinated, software endeavour finally reached fruition. The energy consumption of the network decreased by 99.95% &nbsp;electricity savings equivalent to switching off the entire country of finland.</p><p>The merge involved the amalgamation of the mainnet and the beacon chains. The beacon chain was the original pos blockchain which was designed to test the sustainability and reliability of using pos on ethereum. At first, the beacon chain didnt handle mainnet transactions. Its main job was to reach an agreement on its internal state, which included determining the active validators and their account balances. After thorough testing, it evolved to include real-world data consensus. Once the merge was finalised, the beacon chain took on the responsibility of being the consensus engine for all network data, including execution layer transactions and account balances.</p><figure class="image"><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/post_merge_stages_0f8c38a068.png" alt="post-merge-stages.png"></figure><p>The complexity of the merge lay in fundamentally altering the consensus mechanism of ethereum. Several key goals propelled the chain to the merge:</p><ul><li><strong>More decentralization:</strong> the transition aimed to lower the hardware requirements for node operators, increasing the decentralization of the network.</li><li><strong>Faster transactions:</strong> while overall transaction speed remained similar, the move to pos aimed to provide faster transaction confirmations.</li><li><strong>Energy efficiency:</strong> the merge targeted and achieved a significant reduction of 99.95% in energy consumption by node validators compared to pow, addressing environmental concerns.</li><li><strong>Scalability:</strong> the transition paved the way for more scalability solutions, such as sharding, which could enhance ethereums ability to handle a larger number of transactions and smart contracts.</li><li><strong>Security:</strong> the adoption of pos was expected to increase security through client diversity and the economic incentives for validators.</li><li><strong>Increased adoption:</strong> many users who were reluctant to use eth due to environmental concerns will now be able to experience ethereum. Similarly, moving to pos would be inviting to large traditional firms, who have shown interest in investing, but have been unsure due to slower speeds and the carbon footprint.</li><li><strong>Economic changes:</strong> the merge aims at slowing down the inflationary growth and making eth more deflationary.</li></ul><h2 class="wp-block-heading" style="-webkit-font-smoothing:antialiased;-webkit-text-stroke-width:0px;background-color:rgb(255, 255, 255);box-sizing:border-box;color:rgb(22, 22, 22);font-family:MaisonNeue, -apple-system, system-ui, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Fira Sans&quot;, &quot;Droid Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;font-size:3rem;font-style:normal;font-variant-caps:normal;font-variant-ligatures:normal;letter-spacing:normal;line-height:1.5;margin:0px 0px 4rem;orphans:2;padding:0px;position:relative;text-align:left;text-decoration-color:initial;text-decoration-style:initial;text-decoration-thickness:initial;text-indent:0px;text-size-adjust:100%;text-transform:none;white-space:normal;widows:2;word-spacing:0px;" id="lz2y5vq5v4o"><strong style="-webkit-font-smoothing:antialiased;box-sizing:border-box;position:relative;text-size-adjust:100%;">Ethereum’s Post-Merge Landscape</strong></h2><p>Once the celebratory fireworks had dampened down, and the anxieties regarding a successful merge had subsided &nbsp;it was time to settle down, observe the changes and assess the outcomes. It was quite evident that it was a roaring success, since the process went off without a hitch, even though there were a few sync issues in the final testnet. We shall now examine the degree of realisation of the aforementioned goals.</p><h2>Decentralisation</h2><p>post-merge, there was a sharp rise in the number of validators. Today, the validator count has increased from 400,000 to approximately 800,000. The increase contributed to the decentralisation of the network. Infact, luganodes happens to be one of those validators offering institutional staking services.</p><figure class="image"><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/validator_count_eth_staked_sincemerge_1_7e82d0cef1.png" alt="validator-count-eth-staked-sincemerge-1.png"><figcaption>Source: <a target="_blank" rel="noopener noreferrer" href="https://dune.com/hildobby/eth2-staking">Dune Analytics</a>&nbsp;</figcaption></figure><h2>Sustainability</h2><p>in the very act of using a pos system, environmental goals were more than achieved. With a 99.95% decrease in energy consumption. Energy consumption equivalent to that of a single application on a laptop can easily be stated as negligible. On the other hand, if the merge hadnt taken place, by now ethereum(pow) alone would have consumed 0.2% of the worlds energy. Effectively the merge is responsible for removing a megaton of carbon from the atmosphere every week.</p><h2>Scalability</h2><p>the merge in itself does not fix the scalability challenges faced or the high fees, but its success guarantees that the groundwork has been laid for upgrades like sharding and verkle trees which will eventually fix these issues. Sharding will partition the blockchain, allowing for faster transaction processing and more efficient resource utilization, while verkle trees enhance data security and reduce storage costs &nbsp;more on that later! These upgrades in combination with layer 2 rollups promise substantial scalability improvements. The current goal of the ethereum team is to achieve this.</p><h2>Security</h2><p>the transition to proof of stake has enhanced the security and bolsters resistance against attacks. According to <a target="_blank" rel="noopener noreferrer" href="https://consensys.io/blog">consensys</a>, attempting to control over 51% of the network, which would enable rewriting parts of the blockchain, would demand an investment exceeding $11 billion, reinforcing the networks robustness. This combined with a diversification of clients provides strengthened security.</p><h2>Stakeholder engagement</h2><p>now, investors keen on environmental, social, and governance (esg) principles can stake their eth tokens for passive income, free from high gas fees and mining hardware competition. This achievement has opened doors for institutional investors. While this category is still in its nascent stage &nbsp;owing to the regulatory challenges, we have seen promise. <a target="_blank" rel="noopener noreferrer" href="https://blockworks.co/news/institutions-bullish-on-eth-price">A study earlier this year</a> demonstrated that 77% of investors believed that the merge would catalyse eth investments. In current times too, for example, approximately 13% of eth is staked with major staking services which provide institutional staking, like <a target="_blank" rel="noopener noreferrer" href="https://www.luganodes.com/?utm_source=stakingrewards.com&amp;utm_medium=article&amp;utm_campaign=eth_post_merge">Luganodes</a>.</p><figure class="image"><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/luganodes_eth_dashboard_4577ef1672.png" alt="luganodes-eth-dashboard.png"></figure><h2>Economic achievement</h2><p>Another key milestone was that around a month after the merge ETH was deflationary for the first time. More eth was burnt than created, leading to a reduction of 0.13% in supply over a week, equivalent to about 4,000 tokens. The rate of new eth creation decreased by 90%. Over the last year, 700k eth was issued and 1m eth burned &nbsp;amounting to a 300k eth net supply reduction.</p><figure class="image"><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/ethereum_supply_18c427bfa3.png" alt="ethereum-supply.png"><figcaption>Credit: <a target="_blank" rel="noopener noreferrer" href="https://twitter.com/ultrasoundmoney/status/1702599071398277183">https://twitter.com/ultrasoundmoney/status/1702599071398277183</a></figcaption></figure><h2>Whats Next on Ethereums Roadmap</h2><p>according to vitalik, the merge merely marked the first phase of multiple phases which will bring significant changes to ethereum. Currently, after the merge, the network is said to be just 55% complete. And work on all of these phases is concurrent, and not in stages as one may assume. The end goal is to scale ethereum towards ~100,000 transactions per second and build a digital future for all of humanity.</p><h2>The Surge</h2><p>the merge set the stage sharding, which reduces data storage costs and paves the way for increased transaction throughput. Initially, shard chains focus on data availability, with subsequent versions extending their capabilities to execute code and support smart contracts. The introduction of proto-danksharding (pds) is set to significantly boost throughput as an interim step towards full danksharding, promising even greater scalability. Simultaneously, layer 2 rollups play a crucial role, leveraging shard block data to drive substantially improved scalability, while ethereum layer 1 continues to ensure security. The surge marks a concerted effort to enhance ethereums capacity and performance for a more robust and efficient blockchain ecosystem.</p><h2>The Verge</h2><p>the verge, as described by ethereums co-founder vitalik buterin, represents a significant upgrade in the form of verkle trees. These trees offer a potent enhancement to merkle proofs, substantially reducing the size of proofs. In practical terms, verkle trees optimize storage and reduce node sizes, a vital step in making ethereum more scalable. They allow for the storage of large amounts of data while providing concise proofs that can be verified efficiently using only the root of the tree. Although still relatively new and not as widely recognized as other cryptographic solutions, verkle trees hold the promise of greatly improving the efficiency of proofs, contributing to ethereums ongoing scalability efforts in conjunction with sharding and rollups addressed in the surge phase.</p><h2>The Purge</h2><p>the purge is focused on simplifying and streamlining the network. By removing old network history and introducing history expiration, it significantly reduces the historical data storage burden and technical debt for ethereum node operators. The proposal sets a one-year threshold for storing historical data, providing nodes the option to locally prune this data. New nodes will adopt a checkpoint sync mechanism instead of syncing from the genesis block, enhancing efficiency. This strategic move not only reduces disk requirements but also streamlines code processing for historical blocks. Coupled with previous roadmap stages, the purge is expected to alleviate network congestion and enhance ethereums transaction throughput capacity.</p><h2>The Splurge</h2><p>the splurge represents the final phase in ethereums ambitious roadmap, following the integration of the previous major upgrades. It serves as a platform for a series of smaller, but crucial, improvements that add the finishing touches to ethereums vision for a more efficient blockchain. Ethereums co-founder, vitalik buterin, characterises this phase as the enjoyable stuff that follows the merging of the preceding phases. While the timeline for these technological advancements may extend over time and undergo refinements, its clear that ethereums network will evolve significantly, ushering in new rules and possibilities by the time the splurge is realised.</p><figure class="image"><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/whats_next_ethereum_d585278e59.png" alt="whats-next-ethereum.png"></figure><h2><img class="image_resized wp-block-image size-full" style="-webkit-font-smoothing:antialiased;-webkit-text-stroke-width:0px;background-color:rgb(255, 255, 255);box-sizing:border-box;color:rgb(22, 22, 22);font-family:MaisonNeue, -apple-system, system-ui, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Fira Sans&quot;, &quot;Droid Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;font-size:16px;font-style:normal;font-variant-caps:normal;font-variant-ligatures:normal;font-weight:400;letter-spacing:normal;margin:0px 0px 40px;orphans:2;position:relative;text-align:left;text-decoration-color:initial;text-decoration-style:initial;text-decoration-thickness:initial;text-indent:0px;text-size-adjust:100%;text-transform:none;white-space:normal;widows:2;width:780px;word-spacing:0px;" src="https://cms.stakingrewards.com/wp-content/uploads/2023/09/whats-next-ethereum.png" alt="" srcset="https://cms.stakingrewards.com/wp-content/uploads/2023/09/whats-next-ethereum.png 1204w, https://cms.stakingrewards.com/wp-content/uploads/2023/09/whats-next-ethereum-360x202.png 360w, https://cms.stakingrewards.com/wp-content/uploads/2023/09/whats-next-ethereum-80x45.png 80w, https://cms.stakingrewards.com/wp-content/uploads/2023/09/whats-next-ethereum-768x432.png 768w" sizes="100vw" width="1204">Conclusion</h2><p>Looking back, it is indeed inspiring to see that with an undaunting spirit, we can achieve so much as a community. An event considered too complex to fathom, let alone execute &nbsp;was smoothly conducted. If this could be achieved, this only makes us more hopeful for the future. Ethereum has solidified its position as a leading blockchain platform, offering not only environmental responsibility but also the promise of an increasingly efficient and scalable ecosystem. A decentralised digitised civilization is not far from the horizon.</p><h2>Luganodes</h2><p>Ethereums move to a proof of stake, ushers a new turn in the web3 world and as a staking service, luganodes is ecstatic for this new chapter. Luganodes is a swiss-operated institutional-grade non-custodial staking provider born out of Lugano Plan B program, an initiative driven by tether &amp; city of lugano. Currently, they are the worlds fastest-growing provider with aum ~$700 million worth of staked assets live on 22+ pos networks, including ethereum. It is also one of the first staking providers which adheres to soc 2 type ii compliance, gdpr and iso 27001 certification.</p><p>If you are interested in staking with <a target="_blank" rel="noopener noreferrer" href="https://www.luganodes.com/?utm_source=stakingrewards.com&amp;utm_medium=article&amp;utm_campaign=eth_post_merge">Luganodes</a> or would like to learn more about &nbsp;feel free to visit them on their website. They provide high uptimes, lucrative returns and top-notch support.</p><p>Luganodes is trusted by, and provides services to major players such as bitfinex, coinlist polygon, and tron. Luganodes is one of the top validators on polygon and tron, making them the leading block producers in every ecosystem. Much like them, your company too can benefit from world-class web3 infrastructure. For partnerships, you can get in touch with them at <a href="mailto:max@luganodes.com" target="_blank" rel="noopener noreferrer">max@luganodes</a>.</p>

Ethereum’s Post-Merge Renaissance: A Journey to Sustainability and Scalability

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