According to Coincu, one year after Ethereum's transition from the Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism, the network has experienced a significant decline in energy consumption and increased accessibility. However, ongoing technical challenges continue to impact its progress.
Data from the Ethereum analytics platform ultrasound.money shows that since the transition, the network has minted 681,049.69 Ether while burning 980,847.58 Ether, resulting in a net supply reduction of 299,797 Ether, equal to a 0.248% annualized decrease. Ethereum's Merge upgrade, which took place on September 15 of the previous year, shifted the network from PoW to PoS, significantly reducing its overall energy usage. The Goerli testnet will soon be replaced by the new testnet, Holesky, following years of development for the developer community.
The Merge also turned Ethereum into an economically deflationary network, with the issuance of new ETH to secure the network outpacing the ETH removed from circulation. Despite expectations that ETH's price would increase due to deflationary pressure, various macroeconomic challenges, such as banking crises and rising inflation, have somewhat dampened these predictions. Ethereum's growth in value has been overshadowed by Bitcoin's price surge in the first quarter of this year, as the leading cryptocurrency appears to benefit from traditional financial instability caused by banking crises. As Ethereum continues to make progress in sustainability and accessibility, it faces ongoing obstacles in the ever-changing cryptocurrency landscape.
