Ethereum Gas Consumption Is Down 99.99% Since The Merge
Ethereum gas consumption has plummeted 99.99% since The Merge, transforming the network into a more environmentally friendly platform.
One year after the major upgrade, The Merge, which marked the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus, Ethereum has achieved certain improvements, including a record drop in gas consumption.
According to data from Glassnode Alerts, Ethereum’s daily energy consumption has been down 99.9% post-Merge.
Additionally, gas fee pressure on the Ethereum network has eased despite the recent SocialFi hype. In the past, gas fees on the Ethereum network were inclined to explode due to increased network activities. This gas fee optimization could result from Layer-2 scaling solutions’ development, one of the remarkable progresses this year.
However, most arguments point to the fact that the poor performance of NFT, and meme trend’s losing steam have decreased the demand for gas usage over the past few weeks. Ethereum consequently turned to deflationary due to the price plunge. With over 300,000 ETH burned, Ethereum has deflated annually at 0.25%.
What to Expect on Dencun Upgrade?
Following The Merge, the Ethereum community turned its eyes to Dencun, the next major upgrade anticipated by the end of 2023. During the All Core Devs on September 15, a monthly meeting of the Ethereum developers, the team reportedly discussed a number of core areas, including the Ethereum Improvement Proposals (EIPs) ahead of the Dencun upgrade.
According to the meeting minutes, EIP-4844 is among the key points of the next upgrade. EIP-4844 is expected to improve the network’s security and scalability.
Currently, clients such as Prysm, Besu, and Geth are undergoing Devnet-8. EIP-4844 introduces “blob-transaction,” a new transaction format that facilitates gas fee optimization through the process of blob-carrying transactions between Layer-1 and Layer-2.
While The Merge was expected to enable the withdrawal of staked ETH, post-event, in fact, has brought more participants to Ethereum staking. As of August 31, more than $20 billion worth of ETH has been staked, with Lido Finance accounting for 32.4% of all staked Ethereum.
However, the dominance of Lido raises the centralization concern. That’s why the Ethereum team discussed the implementation of the EIP-7514. Tim Beiko, Ethereum Protocol Developer, said that the latest conversation was “about whether to add a constant cap to the validator activation queue. The proposal had since then been formalized as EIP-7514.”
The EIP-7514 is particularly important to prevent risks when Dencun is launched. This proposal is expected to address the centralization risk revolving around liquid staking by limiting the number of validators added to the network per epoch to 8 validators.
The Dencun upgrade will overall make Ethereum work more efficiently behind the scenes, getting ready for more improvements in the future, like a new way to organize data called SSZ, which will make Ethereum safer, more efficient, and run even better.
The FTX Hangover Continues
Before Dencun can be implemented, there is concern about the upcoming FTX token sale. Last week, Judge John Dorsey approved the bankrupt entity’s proposal to liquidate its crypto assets. FTX plans to sell billions worth of crypto assets without prior notice to the public.
FTX still has loads of assets, and it looks like they are coming to the market.
As reported, FTX intends to sell billions of dollars in crypto that it owns in order to collect funds to repay creditors. The deadline for that plan to be approved was September 13, 2023. The company has $192 million worth of Ethereum in its holdings, in addition to other Category A cryptocurrencies such as Solana ($1,162 billion) and Bitcoin ($560 million).
FTX also holds about $900 million in Category B tokens, defined as having low liquidity. These include prominent names such as Serum (SRM), Blur (BLUR), Polkastarter (POLS), Maps.me (MAPS), Oxygen (OXY), and Bonfida (FIDA).