In the world of digital technologies, Ethereum has grown into a juggernaut that is only second to Bitcoin. Ethereum gained its position due to its smart contracts and its versatility in handling all kinds of transactions. This platform has gained the moniker “<a href="https://ethereum.org/en/">the internet of assets”</a> due to its diverse application in multiple sectors. 

The platform has had diverse applications, such as the development of a cryptocurrency, ownership of assets, and project development. The diverse applications have seen the platform's value bloom over the last few years. 

However, this growth has recently stalled. This stalling is due to some issues that have weighed down the monolithic technological platform and competition from other blockchain platforms.  As a result, changes to the platform in the form of the <a href="https://ethereum.org/en/energy-consumption/#the-merge">Ethereum Merge</a> were announced and rolled out. This merge is considered a historical moment in the Crypto world. This article will explore the impact of ETH merge on its supply, the environment, and its holders.

What is the Ethereum Merge?

The term merge refers to a number of changes to the Ethereum network that will roll out from June 2022. The merge is typically a change from the proof-of-work (PoW) system currently used to the proof-of-stake (PoS) system that is common in newer blockchains. 

The merge will facilitate the combination of the <a href="https://ethereum.org/en/upgrades/merge/">Ethereum Mainnet and the beacon chain</a>. This change will involve the combination of the existing execution layer with a new consensus layer. This combination will, in turn, improve the network. The improvements will make the network faster, more secure, cheaper, and more energy-efficient. 

However, it is important to note that while the changes may influence the tokenomics of the Ethereum network, the <a href="https://fortune.com/2022/03/28/3-misconceptions-ethereum-merge/">gas fees</a> remain the same. 

What are the Effects of the Ethereum Merge?

The changes experienced during the merge will impact the environment, ETH supply, and investors. 
<h3>Effect on the Environment</h3>
The transition will help boost the environment-friendly application of the digital platform. The introduction of these changes mentioned above will result in the miners moving from cryptographic mining, which is particularly harmful to the environment. The proposed proof-of-stake (PoS) model will be more energy-efficient than the existing proof-of-work (PoW) model. The new system will significantly reduce emissions as the consumption of fossil fuels will be greatly reduced compared to the use of cryptographic mining.

The Ethereum Merge will facilitate the reduction of ETH issuance by 90%. In this move, the native coin, ETH, will have reduced daily emissions by <a href="https://www.fool.com/the-ascent/cryptocurrency/articles/heres-what-the-ethereum-merge-means-for-investors/">99.5%</a>. This figure means daily emissions will be at 1280 ETH from 12000 ETH. Thus, by cutting down on the energy used to maintain the network, the <a href="https://www.cryptoknowmics.com/news/chilliz-pullbacks-from-q1-2022-highs-chz-may-retest-0-24">environmental concerns</a> posed by the network’s use will be addressed.
<h3>Effect on ETH supply</h3>
Due to the change in the system, the number of ETH tokens being rolled out into the market will significantly decrease. The supply of Ethereum will undergo a major cut. These changes will result in the cutting down of the issuance of the token in a bid to become a deflationary token. 

These changes will translate to a yearly decrease in ETH issuance from 12000 ETH to 1280 ETH. This change in issuance will result from the change in the system. These changes will decrease its supply by limiting the number of tokens by minting fewer tokens.
<h3>Effect on Holders</h3>
The Ethereum Merge provides an avenue with even greater promise for those who will hold ETH tokens than before. The holders of the coin can earn from participating in the proof-of-stake (PoS) system that is being introduced. This system will allow them to make even more earnings than before from their assets. Proof-of-stake validators will be able to earn more from their assets using the newly introduced Beacon chain. 

Currently, the individuals earn approximately 4.7% APR. However, these validations will be paid approximately double the current rate after the changes are complete. This move will see validators earn between 10%-15% following the transition. This amount increases because the transition will redirect payments made to miners to holders of the coin that facilitate the proof-of-stake system.

The reduction in inflation from 4% to 0.43% will also help increase the value of ETH tokens in the long term. The limited supply and low inflation will drive up the worth of assets owned by holders. 
<h2>Author’s Take</h2>
The Ethereum Merge is the largest upgrade done to the Ethereum networks in its history. This change has been cited to resolve many issues and better the <a href="https://www.cryptoknowmics.com/news/elon-musk-becomes-the-largest-stakeholder-in-twitter">performance</a> of the network. While clearly benefiting the network’s performance the change led to several impacts on the environment, holders, and ETH supply. The change benefits the environment by leading to less energy use. 

The move also increases ETH prices while providing holders with opportunities to earn even more money. The process causes the ETH tokens to be deflationary. This move means that supply will be lower as fewer tokens will be minted. Thus, while being a welcome move for the environment and users, the change also holds some repercussions for the network and its community.

The Ethereum Merge; How Will it Impact ETH Supply, the Environment, and Holders

The platform has had diverse applications, such as the development of a cryptocurrency, ownership of assets, and project development.

Adam is an outgoing young lad who likes adventures and discovering new things.Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.

The Ethereum Merge; How Will it Impact ETH Supply, the Environment, and Holders

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