Since The Merge, the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus, Ethereum’s gas consumption has dropped significantly, making it a more environmentally friendly platform. Data from Glassnode Alerts reveals that Ethereum’s daily energy consumption has decreased by 99.9% post-Merge. This reduction in gas consumption has also alleviated the gas fee pressure on the Ethereum network.
One possible reason for this drop in gas consumption and gas fee optimization is the development of Layer-2 scaling solutions. These solutions have aided in mitigating the explosive gas fees that were previously observed due to increased network activities. Additionally, the decline in the popularity of NFTs and meme trends has led to decreased demand for gas usage.
In terms of deflation, Ethereum has seen a plunge in price, resulting in over 300,000 ETH being burned. This has caused Ethereum to become deflationary, deflating at a rate of 0.25% annually.
Looking ahead, the Ethereum community has its sights set on the Dencun upgrade, expected to occur by the end of 2023. The recent All Core Devs meeting discussed key areas for the upgrade, including Ethereum Improvement Proposals (EIPs) such as EIP-4844, which aims to improve the network’s security and scalability. This upgrade introduces a new transaction format called “blob-transaction” that facilitates gas fee optimization.
With the increasing popularity of Ethereum staking, there are concerns about centralization. To address this, the implementation of EIP-7514 is being considered, which would add a constant cap to the validator activation queue to mitigate centralization risks.
Furthermore, the Dencun upgrade aims to enhance Ethereum’s efficiency, with improvements like SSZ, a new way to organize data that will make Ethereum safer and more efficient.
However, before Dencun can be implemented, there are concerns about the upcoming FTX token sale. FTX plans to sell billions worth of crypto assets without prior notice to the public in order to repay creditors. This sale includes a significant amount of Ethereum held by FTX.
In conclusion, Ethereum’s gas consumption has significantly decreased since The Merge, making it more environmentally friendly. The upcoming Dencun upgrade aims to further improve the network’s efficiency, but concerns about the FTX token sale remain. Sources: Glassnode Alerts, All Core Devs meeting minutes.