The Bernstein Report highlights the strong institutional adoption of ETH following the Merge of leading altcoin Ethereum. The report states that combining the new economic model under Merge with token burning could lead to negative token emission during periods of high demand.
“PoS altcoin project will increase institutional adoption”
cryptocoin.com As you follow, the highly anticipated Ethereum Merge has finally been successful. Thus, the leading altcoin Ethereum has now become the project powered by the Proof-of-Stake (POS) consensus mechanism. In a research report, Bernstein discusses the Ethereum Foundation’s successful completion of Merge early Thursday. The report highlights that Merge will lead to strong institutional adoption of the blockchain token Ethereum (ETH). Bernstein makes the following assessment in the report:
The Ethereum Blockchain will emerge as a digital asset category leader, given its economic transition, scalability roadmap, and vibrant digital economy built on top of it. Also, altcoin will be strongly adopted institutionally due to its leading market share, market cap and liquidity.
The report notes that block #15537394 was the first block verified under the Proof-of-Stake (POS) system. Approximately 45 ETH was paid for this transaction. Bernstein says the validator participation rate is about 95%. It also states that ‘the chain reaches finality’ a few minutes after the transition.
What does Ethereum Merge mean in terms of investment?
Merge is the first of five planned upgrades for the Ethereum Blockchain. It involved the transition from a Proof-of-Work (PoW) to a more energy-efficient Proof-of-Stake (PoS) consensus mechanism. Bernstein says graphics processing unit (GPU) mining networks are unnecessary after the transition. He notes that it will likely be used on Ethereum forks, Ethereum Classic, or the gaming industry.
According to analysts Gautam Chhugani and Manas Agrawal, the successful Merge is the result of years of planning. It is also an important milestone in the Foundation’s roadmap to “Make Ethereum the world’s largest decentralized supercomputing network”. Ethereum’s token emissions will be reduced by about 90%. In addition, the energy use of the network will drop by about 99%. From an investment perspective, these issues are very important. Meanwhile, analysts also underline that ETH holders can now earn a staking return. Analysts also highlight the following:
The new economic model following Merge, coupled with token burning, is likely to lead to ‘negative token emissions’ in times of high demand. This puts a ceiling on the total ETH supply and provides ‘digital scarcity’.
