Let's be honest — the tech behind the #EthereumMerge isn't groundbreaking.
There are a number of chains that have already implemented Proof of Stake (PoS) infrastructure in ways superior to Ethereum. What's more, the issues Ethereum has pre-merge will be the same issues it has post-merge, chief among them scalability. Scalability remains a problem for everyone, including the so-called "scalability solution" EVM chains. This means the ETH chain won't really mean much to retail... you know, the mainstream adopters Ethereum needs to actually grow and price pump the token. They're waiting on games and business applications, not a switch to PoS.
Honestly, it seems as though the Ethereum Foundation did the PoS changeover for political reasons, not technical ones. Maybe they got tired of environs tweeting them to death about carbon footprints. Maybe they really have been infiltrated by IMF/BoS agents who are slowly turning Ethereum into the zombie crypto arm of the tradfi system. Who knows.
As for being competitive in the crypto marketplace, Ethereum has first mover advantage and a certain level of sustainable trading volume. That's it. The Merge doesn't build on this, and I really don't expect it to have a huge effect on any retail metric in the near future, including price. Why?
The ETH merge does not ensure ETH dominance.
Culture Focused L1s Will Do Fine.
The L1s that focused on cultivating a culture won't be affected by the Ethereum Merge. Chains like Tezos and Flow are not technically inferior to Ethereum either pre or post-merge. And they have something Ethereum doesn't have — no misplaced conceptions of functioning as anything other than a traditional business with targeted marketing to a specific demographic (Tezos, hippie artists; Flow, underserved communities). All that fake decentralization talk goes out the window.
Ethereum pretends it's not based off a centralized Foundation and therefore can't conduct marketing to a specific audience. It has definitely attracted a culture — college-age trust fund babies who desperately want to flip NFTs instead of getting a job after graduation. But Ethereum won't claim them like Tezos and Flow claim their folks. As a result, the people who go to Tezos, Flow, and other culture chains will stay there for the culture. ETH moving to PoS means nothing to them, especially since gas fees in the current low volume bear market have made ETH affordable to anyone.
Those Miners Have to Go Somewhere
ETH's displaced miners aren't just going to quit. That passive income gets addictive! I fully expect former ETH miners will add their computing power to lesser known PoW chains like Ravencoin. The new strength in those networks will provide added infrastructure to compete with Ethereum. So far, these chains haven't expressed a need to kowtow to politics, so PoW isn't going anywhere. And since some of these networks were actually built from stronger technical specs, that competition to ETH won't be cursory. It will increase.
More secure PoW networks means more VC interest in PoW chains. More VC interest means more money for developers, which means more people building on those chains. And face it — the next era of mainstream adoption won't come with any chain culture attached to it. The retail schlups who want new games and business applications aren't going to have these preconceived notions of one chain being better than another. NBA Top Shot is Flow. Unstoppable Domains is Zilliqa. The stronger these smaller chains get, the more intellectual capital they steal from Ethereum.
ETH's Price Won't Pump Enough to Bring Retail
Rando anons on Twitter who's favorite saying is "NFA" are somehow convinced that the Merge will bring instant pumpage to their $ETH bags. Nope! This Twitter thread explains why.
You don't pump the price, you don't get new retail. The only people in the market post merge will be the people in now – devs and those goofy trust fund college kids. You can bet the price narrative won't change until the Federal Reserve changes its inflation policy to expand the money supply again, which could be months from now.
When this happens, I predict that you're going to see a lot less action in Ethereum than you think. What's more, the smaller chains with more illiquid tokens tend to behave as leveraged Ethereum. When the market comes back, you'll see the same outperformance in all coins that you've seen in every bull market. Traders will move into chains like Tezos and Flow for the gains.
In short, don't be fooled by this political chicanery. The Ethereum merge isn't going to have as big of an effect as you think, and L1 chains that maintain their audiences will do just fine in the coming years.
---
Make $1000/Day in NFTs — https://twitter.com/alucard0x
