Key points are not available for this paper at this time.
On 15 September 2022, the Ethereum network adopted a proof-of-stake (PoS) consensus mechanism. We study the impact on the network and competing platforms in a two month event window around the Beacon chain merge. We find that the transition to PoS has reduced energy consumption by 99. 98%. Miners have not transformed into validators, and total block reward income (in USD) has fallen by 97%, though transaction fees (in ETH) for Ether have increased nearly 10%. The Herfindahl index for the top 10 is 1009; the network is 19% less concentrated after the merge. Ethereum supply growth has been deflationary since the merge. The time between consecutive blocks is now steady at 12 s and transactions per day are up 7. 0%. On Polygon, Matic fees rose but token fees fell. Polygon also slows, processing 3. 3% fewer transactions per day. Solana’s fees fall by 0. 0003, and transactions per day are down 48%. Stablecoin transfer volumes fall on Ethereum and Polygon, but rise on Solana.
Kapengut et al. (Wed,) studied this question.