As Ethereum moves towards proof-of-stake (PoS), a decentralized finance (DeFi) researcher has argued that the platform may overtake the throne of Bitcoin (BTC) as the leading exponent of cryptocurrencies.
In a Twitter thread, researcher Vivek Raman highlighted that Ethereum merger could create a better economic structure for the smart contract platform. According to Raman, the switch to PoS decreases Ether (ETH) inflation, gives better security and positions the cryptocurrency as a digital bond.
Raman said that after the Merge, ETH inflation will drop from 4.3% to 0.22%. The researcher explained that this gives the ecosystem a 95% reduction in issuance, limiting the number of ETH that can be sold in a day.
Furthermore, the researcher also explained that the platform will work with better security after Merge. Citing a post by Ethereum co-founder Vitalik Buterin, Raman highlighted that it would cost more to attack the network once it runs in PoS.
Apart of this, Raman also believes that the Ethereum Merge will allow ETH to complement Bitcoin’s use cases as a store of value and collateral.. While BTC will function as digital gold, Raman argues that ETH will be positioned as a digital bond and the main DeFi asset used as collateral.
In early July, the average gas fees required to transact on the Ethereum network dropped to $1.57, a figure last seen in 2020. The drop in gas fees follows the downward trend of non-fungible token (NFT) sales, with daily NFT purchases falling to one-year lows.
While network gas fees are low, registrations for the Ethereum Name Service skyrocketed by 200%. This happened in early July, when the ENS Dashboard showed a jump from 11,042 records to 29,727. The buzz is also attributed to the second-biggest sale of ENS, which came on the same weekend as the surge in registrations.
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