The Merge will not reduce gas prices or increase Ethereum transaction speeds, but NFT projects may benefit from energy savings and deflationary pressure.
Merger Affects All Ethereum Projects
In just over seven years since its launch as a Proof of Work (PoW) network in 2015, ethereum switched to Proof of Stake (PoS) September 15th. merge Affects all Ethereum projects, including Non-Fungible Token (NFT).
After the merger, Ethereum NFTs will undergo two notable changes. First, the user will see a significant reduction in energy consumption. Second, the value of Ethereum could rise if the token deflationed.
The NFT Club estimates that the energy required to add an NFT to the blockchain is equivalent to adding approximately 83 kg of CO2 to the atmosphere.
Whether its calculations are accurate or not, Ethereum’s PoS mechanism reduces the chain’s energy consumption and carbon footprint by over 99.9%. The Merge upgrade also simplifies the process of creating and developing Ethereum NFTs and projects.
Future upgrades to Ethereum will also reduce maintenance costs for NFT projects, lower gas prices and encourage wider adoption of NFTs. The ease of issuing and maintaining NFTs could hint at the rapid rise of Ethereum.
OpenSea, the world’s largest NFT marketplace, has confirmed that it will only support PoS NFTs after the Ethereum merger. publication.
Merger Impact on NFT Supply
One of The Merge’s goals is to convert Ethereum from an inflationary token to a deflationary token. That is, the overall supply will decrease over time. Before The Merge, Ethereum was more susceptible to inflation than Bitcoin. This is because, unlike Bitcoin, Ethereum has no theoretical cap on total supply.
A deflationary Ethereum could in turn affect the NFT market. As the value of Ethereum rises, the price of NFTs built on Ethereum may rise.
Christine KimPrincipal Scientist at Galaxy Digital said: interview Bloomberg says that reducing the supply of Ethereum tokens will help Ethereum investment as it can maintain its value against inflation. In the long term, these changes could have a positive impact on NFT pricing and sustainability.
Potential NFT security concerns?
Adam McBrideHost of NFTnow and rugradio.
Since there are two forks of Ethereum, your NFT will have two versions, one in the traditional PoW form and one in the new PoS fork.
Users who sell PoW NFTs and attempt to redeem them on forks may be exposed to “replay attacks” where transactions on one fork may be replayed on another.
McBride gives a hypothetical example where a CryptoPunk owner sells a PoW NFT for 5 ETHW, and then (using a “replay attack”) someone sells a PoS NFT for 5 ETH.
McBride said, “It hurts.”
After The Merge, BlockSec was the first analytics service. flag suspected replay attacks As a result, 200 ETHW tokens were exploited on Omni Bridge. However, the EthereumPoW team denied that this was a result of an error in the contract of the bridge itself, rather than an abuse of his PoW chain.
Impact on the “Ethereum Killer”
It will be interesting to see what happens in the future in the battle between Solana, Polygon and Ethereum for NFT dominance as a result of the new shift.
However, Ethereum gas prices will not be immediately reduced by The Merge, so other chains will retain their advantage. At the moment, Solana may be more likely his NFT than Ethereum, thanks to the high speed and low cost of Solana transactions.
moreover, BNB chain While still developing its nascent NFT ecosystem, it continues to demonstrate high performance and low fees.
“Feelings towards PoS chains such as BNB chains and Solana already indicate that some users prefer collecting NFTs on greener chains. said Luke Rare, growth lead for Rareboard. BSC News“NFT growth will come from new use cases, better tools, and a platform with improved user experience and onboarding process.”
Ethereum’s Merge may go down in history as one of the most important crypto upgrades of all time (at least so far). Early security threats such as replay attacks may appear, but they will be resolved soon. Most market experts expect The Merge to have a positive impact on his NFT market.
Next week, we’ll bring you an interesting discussion about NFTs. Until then, stay tuned.