Arthur Hayes – the co-founder and former CEO of one of the most popular cryptocurrency derivatives exchanges (BitMEX) – has laid out some thoughts on Ethereum’s Merge.
In a recent tweet, Hayes argued that the only thing that matters (price-wise, seemingly), for ETH after the Merge is its net issuance.
- To those unaware, Ethereum’s transition from proof-of-work to proof-of-stake introduced a dramatic shift in the cryptocurrency’s issuance model.
- The summarized calculations of ETH’s issuance following the Merge was given by the Ethereum Foundation itself:
ETH Issuance TLDR
-Mining rewrds approximately 13,000 ETH/day pre-merge
-Staking rewards approximately 1,600 ETH/day pre-merge
After the Merge, only the 1,600 ETH per day will remain, dropping total new ETH issuance by approximately 90%
The burn: At an average gas price of at least 16 gwei, at least 1,600 ETH is burned every day, which effectively brings net ETH inflation to zero or less post-merge.
- Commenting on the matter, Hayes said that the Net ETH Emissions chart is the only one that matters after the Merge.
- The former BitMEX CEO also argued that the continuous decrease in ETH’s net emissions is what’s likely to bring the next bull market, albeit phrased slightly differently.
- However, it’s worth noting that the change in the supply dynamics is likely to take some time. At the time of this writing, the supply after the Merge has actually increased.