As most of us all know, the ETH merge is coming within days. Many of us understand the merge and what it has to offer:-99.95% less energy use-New burn mechanics-gas fees and Eth revenue stays the sameIt is obvious that if you're an ETH holder, you will greatly appreciate this merge.For over two years, talk of a new and improved Ethereum blockchain circulated in DeFi circles and beyond, offering promises of hope for users hampered by Eth’s exorbitant fees and lagging network throughput. The moment is finally upon us, as the biggest crypto news event of 2022 (in a year full of jaw-dropping events) is set to occur sometime around September 15, 2022.The transition to Ethereum 2.0, known as the “Merge,” has made headlines across DeFi and mainstream media outlets in the weeks and days leading up to it. In this post, I'll break down what will take place, how it will impact Ethereum users, and whether this redesigned Ethereum model measures up to the technology of a low market cap coin (Spoiler Alert: It doesn’t).What is the Merge?The Ethereum Proof-of-Work blockchain launched on July 30, 2015, providing novel levels of utility through smart contracts built to power thousands of decentralized applications. Ethereum succeeded as a network that was secure, programmable, and decentralized. However, block production resulted from its proof-of-work mechanism, which required blockchain miners to use high-powered, energy-draining computers to solve complex algorithms.How severe was Ethereum’s impact on electricity usage? It’s estimated that Ethereum consumes as much as 72 terawatt-hours a year, which is roughly equal to the carbon footprint of the entire country of Switzerland.Crypto wasn’t slowing down, and unfortunately, Ethereum, in its original form, proved it wasn’t able to adapt to the evolving demands of the DeFi community. Furthermore, the emergence of other layer-1 solutions, such as Telos, provided users with a lightning-fast network that was super affordable and used minuscule amounts of energy to process millions of transactions each day. Thus, the road to 2.0 began, with significant changes set to be implemented, beginning with a switch from Ethereum’s Proof-of-Work model to a more environmentally friendly Proof-of-Stake model.Common MisconceptionsWhile the Merge will solve the issue of Ethereum’s high energy demands, it has also induced other expectations that, sadly, won’t be fulfilled. Here are some of the common questions and misconceptions DeFi users have and what they can expect post-Merge.Will Ethereum Be Faster After The Merge?Technically yes, but the difference will be negligible. If you expect Eth 2.0 to offer you Telos-like speed, you’ve gone to the wrong place. But don’t take our word for it; the Ethereum Foundation said so themselves. The same applies to the notion that gas fees will be reduced after the Merge.Will gas fees be cheaper after the Merge?Unfortunately, that also will not be the case. Not to fear, Telos will still offer near-free transaction fees.Can ETH Stakers Withdraw Their Funds?Eventually, yes. However, before that is possible, stakers will need to wait for an upgrade called “Shanghai” to come into effect. If you’re in a hurry, I’ve got more bad news for you; while an official date has not been set, the Shanghai upgrade won’t be ready for at least another 6 to 12 months.Staking APR Will Increase To 200% Post-merge!Um, no. It won’t. The 200% figure was floated around Reddit and Discord groups, but whoever came up with that number was off by a hefty margin. The estimated APR increase will be closer to 50%; however, that figure is not engraved in stone.Will Ether’s Price Increase As A Result Of The Merge?I usually don’t predict price action, especially in a bear market. Ethereum’s chart did show some positive activity in recent months as the Merge drew near; however, I urge caution as current market conditions make a return to ATHs improbable, at least in the short term. See more below.Will The Merge Cause Ethereum To Crash?While nothing is guaranteed, there is no reason to assume the network will shut down during the transition.But how do you make money off of this in the short term? How can you benefit from "buy the rumor sell the news"?In my opinion, the buy the rumor and sell the news has already come and gone. When the merge was announced in late 2020 people speculated eth could be worth 10kea and bought in HEAVY. This was one of the many reasons we a huge rise in prices in Jan 2021.As it became clear that the timeline of the merge would take years and span into the next crypto winter, many sold. I would even go as far as to say that holders saw the writing on the wall and "sold the news". Eth has since sunk below the previous bull market prices but has since regained some value.How to profit:I believe that we have hit capitulation in this sector and many will be ready to jump back in within the following months. I also believe that shorts will have to start covering and we could see a huge rally as the media stops shilling "the end of crypto".Now back to the merge. I believe that we will be starting a new "buy the rumor, sell the news phase". If the merge is successful, mainstream media will start to share a lot of the positives again and start to share many of eth's capabilities and price predictions. I think this will introduce a whole new round of speculation which will send the crypto market into the next bull cycle in early 2023. I also believe that it will likely see even higher peaks with BTC stretching to 200k ea around the time of its next halving the following year. This will likely result in the price of eth closing in on 10k in 2023 and 15-20k by 2024.When to sell:Fomo will sink in. Many will jump onto the crypto bandwagon. The success of Eth, BTC, and many Alts will support many bull theories and help justify the pricing of many cryptos. I will call this the "sell the news" phase. When it is clear that crypto has become an incredibly profitable and viable asset class and use cases are justified is when people will take profits. LOTS OF IT. My suggestion is to take profits in early 2023 and buy back in at lows that year, or DCA throughout the remainder of 2023. You may want to pick up some more BTC at this time too in anticipation of the BTC halving or rumors of other big news events. Pick a price you're comfortable with selling shortly after the halving. Don't get caught at the top again. You don't have to be a HODLer and put crypto on your back to show your support. You also don't have to retire at 28. You just need to take profit when there is some and continue to invest in the years that follow.TL: DRBuy ETH NOW. As much as you can. New ATH in 2023. Pick a price you want to sell at in 2024. Stick to your plan. Don't fall into the hype and buy more than you can afford or are willing to lose. Make sure to take a profit!---BTW: I diversified some of my holdings to Telos.I'm pleased to see Ethereum following Telos’ lead in becoming an eco-friendlier network. Still, while the Merge addresses Ethereum’s energy consumption, it leaves plenty to be desired in areas that plague most users. On the other hand, the Telos Core Development team is building technology and protocols that will make our industry-leading network even faster and more scalable than it is presently, not to mention more profitable for our EVM users.Not familiar with Telos? Consider checking Telos and its Telos EVMThe Telos EVM is the most powerful and scalable Ethereum Smart Contract platform built to power Web 3.0. Telos features a robust, third-generation, ESG-compliant evolutionary blockchain governance system, including smart contracts, advanced voting features, and flexible and user-friendly fee models. In addition, Telos supports the blockchain ecosystem by serving as an incubator and accelerator for decentralized applications through development grants. via /r/CoinMarketCap https://ift.tt/zgrGIpB
Social Media Icons