SummaryEthereum’s rapid growth can be attributed to its composable-driven ecosystem that creates network effects that attract developers and users.The Beacon Chain established a new system that relies on staking ETH rather than PoW mining to prevent sybil attacks and support consensus on the state of the network.Smart contract blockchains must compensate validators for expending resources to secure the network.In order to prevent the network from being spammed, Ethereum and many other blockchains require users to pay a fee in order to consume block space.The Merge is the most significant upgrade in the history of Ethereum, and perhaps any blockchain. Ethereum’s rapid growth can be attributed to its composable-driven ecosystem that creates network effects that attract developers and users. With demand for Ethereum’s limited block space increasing, so too has the cost to transact and the need to scale. In its current state, the network is not suited to absorb this demand, nor achieve its sustainability and scalability goals.The Merge, which refers to the shift in Ethereum’s consensus mechanism from energy-intensive mining operations under Proof-of-Work (PoW) to the more energy-efficient Proof-of-Stake (PoS), will not solve for high transaction fees or alter block times. But it sets the foundation to solve for these issues while improving the monetary properties of ether (ETH), Ethereum’s native asset.In this report, we break dow...
