Introduction

• The Merge has come and gone — what will be the next story, trend, or outlier to dominate the ETH space?
• In this dashboard, let’s examine 4 developing trends and evaluate their impacts in the period after the merge (Sep 16 - Dec 31, 2022).

Approach

• I look at what changes after the merge and compare those with the scenario in which the merge didn’t happen to evaluate their impacts.
• First POS block (link).
• How to calculate miner reward (link).

POW/POS energy consumption and their impacts

• One of the most common criticism for any POW network is energy consumption.
• Moving from POW to POS reduces Ethereum’s energy consumption by an estimated 99.95% (link) from 112 TWh/yr to 0.01 TWh/yr (link).
• Using the estimated numbers above, let’s answer the question below.

How many TWh will be saved by the end of 2022?

From Jan 1 to Oct 2, 2022

• POW Ethereum expended 0.3 TWh per day to secure the network.
• POS Ethereum expended just 0.000027 TWh per day to secure the network.

From Sep 16 to Dec 31, 2022

• POS Ethereum will only has consumed 0.003 TWh to secure the network,
• POW Ethereum would have consumed 32.83 TWh.

==→ Ethereum network will have saved 32.82 TWh (29% of 2021 energy consumption) by moving from POW to POS in 2022.==

Miner/validator reward and its impact on ETH supply

Ethereum is now secured via staking, not computing power. Staked ETH makes it much more expensive to attack the chain than under POW, but less expensive to secure it as less new ETH has to be issued to pay validators than miners.

Structure

• POW/POS energy consumption and their impacts
• Miner/validator reward and its impact on ETH supply
• Block time & its impact on user experience
• Transaction fee & its impact on user experience
• Key highlights
• Conclusion

From Jan 1 to Oct 2, 2022

• before the merge, average daily block time was 13.7 seconds.
• after the merge, average daily block time was 12.1 seconds.
• while average daily transaction hasn’t changed much after the merge.

From Jan 1 to Oct 2, 2022

• before the merge, miner reward per day on average was 13.4K ETH, most of that was new ETH issuance while most of transaction fee was burned.
• after the merge, validator reward per day on average has been 400 ETH, all of that come from a small part of transaction fee, the rest of transaction fee is burned as before the merge.

From Jan 1 to Oct 2, 2022

I use median to minimize large value impact in early 2022.

• before the merge, median daily fee per transaction was 0.0038 ETH.
• after the merge, median daily block time has been 0.001 ETH.

From Sep 16 to Dec 31, 2022

• ETH supply will have reduced by 103K.
• while ETH supply would have increased 931K if the merge didn’t happened.

==→ The merge will have lowered 828K ETH in total ETH supply, which will have positive impact on ETH price.==

Block time & its impact on user experience

Definition

• block time is time between 2 consecutive blocks

Transaction fee & its impact on user experience

From Sep 16 to Dec 31, 2022

If we see block time as wait time of user from submitting a transaction to finality,

thus total wait time = total transaction time = block time * total transaction

• user total wait time will have been 414K hours.
• while user total wait time would have been 463K hours.

==→ The merge will have saved 49K hours of wait time for users by the end of 2022.==

From Sep 16 to Dec 31, 2022

Assuming average daily fee per transaction will not change much by the end of 2022.

• total transaction fee will have been 151K ETH.
• while transaction fee will have been 447K ETH.

==→ The merge will have saved 296K ETH in transaction fee for users by the end of 2022.==

Key highlights

• POW/POS energy consumption and their impacts
  • Ethereum network will have saved 32.82 TWh (29% of 2021 energy consumption) by moving from POW to POS in 2022.
• Miner/validator reward and its impact on ETH supply
  • The merge will have lowered 828K ETH in total ETH supply, which will have positive impact on ETH price.
• Block time & its impact on user experience
  • The merge will have saved 49K hours of wait time for users by the end of 2022.
• Transaction fee & its impact on user experience
  • The merge will have saved 296K ETH in transaction fee for users by the end of 2022.

Conclusion

Looking at 4 developing trends around energy consumption, validator reward, block time, & transaction fee, the Ethereum merge will have had a huge impact on the whole Ethereum network by the end of 2022.

Thanks for reading!