https://twitter.com/sassal0x/status/1511896028730957825

One important thing to note about the first point in my tweet is that what Ethereum is trying to do here has not been done by any large crypto-network before - namely, hot-swapping out a Proof of Work consensus mechanism for a Proof of Stake one. Given that this is an unprecedented event, it is sure to bring with it a lot of media coverage - especially around that 99.98% energy use reduction - as the mainstream narrative around Proof of Work is currently very bad and many people believe that PoW is horrendous for the environment.

The 80-90% issuance reduction coming with The Merge has been talked about for quite some time (I first mentioned it in January of 2019) and it has come to be known as the “triple halving” event (a term coined by SquishChaos). Put simply, issuance is being reduced by this amount because Ethereum Proof of Stake is a much more efficient system whereby block rewards are only paid out to the active validator set which works out to be only a small percentage of the circulating ETH supply. This is in stark contrast to Proof of Work where the issuance rate is currently over 4% and miners are forced to sell lots of their ETH to pay their very high bills. Post-merge, these costs collapse as stakers/validators only have to worry about a minimal electricity/hardware cost and possibly taxes. Oh and as a bonus, ETH will be net deflationary post-merge as long as gas prices are above 20 gwei.

The reason that ETH staking yield (APY) will increase post-merge is because all unburnt fee revenue will be going to stakers/validators instead of miners. Estimates put this yield at around 8-10% which is an insanely good near risk-free yield on ETH. Given that this yield is quite high for such low risk, it will result in more ETH being staked (read: locked up) to balance it out which I think will eventually settle at around 3-5%. Of course, for new ETH to be staked it first needs to be bought on the open market which will just increase demand for an already-scarce ETH.

Finally, and something people are only cluing into it now, is that after The Merge takes place there will be no new ETH entering circulation until Beacon Chain withdrawals are enabled (at least 6 months after The Merge). This is because none of the block rewards that go to validators will be able to be withdrawn nor will any staked ETH be able to be withdrawn - and then when withdrawals are enabled only a certain amount of staked ETH can be withdrawn per day (around 30,000). So yes, you read that right, there will be a deadzone of at least 6 months for new ETH issuance and the network will be burning ETH the entire time thanks to EIP-1559.

If all of the above doesn’t make you extremely bullish on ETH then I don’t know what will. Ethereum is such a unique network with an even more unique economic paradigm around it and it’s quite difficult (if not impossible) to come up with a good bear case for both Ethereum and ETH. I’m not sure how crazy the price is going to get, but given all of the above it’s not farfetched to think that ETH can easily head north of $10,000 after The Merge takes place (all else remaining equal, of course).

You don’t own enough ETH.

This piece was originally published in The Daily Gwei newsletter.

My goal with The Daily Gwei has always been to provide unedited, unfiltered, raw and completely free Ethereum educational updates and content as my way of giving back to a community that has given me so much. It warms my heart every time someone reaches out and thanks me for educating them - especially those who say I’ve changed their lives - it’s just an indescribable feeling.

So to celebrate The Daily Gwei YouTube channel’s 1 year anniversary, I teamed up with the extremely talented _kitteh to create an NFT that immortalizes the room that I broadcast from and one that I have called home for over 20 years now. This NFT will hold a very special place in my heart because in a couple of weeks I’m moving into a new house and a new study so I’m very thankful that I have a piece of memorabilia to always look back on. It also acts as a way for me to “share” a piece of the room that you’ve all watched me sit in for the last year or so - after all, The Daily Gwei is a community that is much larger than just me!

_kitteh describes the NFT in his own words

Anthony’s workspace is not just any ordinary backdrop, it’s a key element to The Daily Gwei’s comforting vibe. For the 1 year anniversary of The Daily Gwei YouTube channel, I wanted to capture the cosy and lore filled broadcasting centre of the channel.

Every episode - 262 days a year - the community gathers together. Surrounded by staking PC’s, overly minimalistic keyboards, NFT displays, to-do notes, rare figurines, huge manga collections, an obscene amount of monitors and much more. Huddled together we take in the latest waterfall of Ethereum news. Sometimes a celebration, sometimes a group therapy session.

In this piece I wanted to turn Anthony into a figurine himself and show the The Daily Gwei viewers a peek beyond the camera’s lens. A lot of details true to life, some fantastical.. what else is hiding in The Daily Gwei’s headquarters? It’s for you to discover!

I’ve always been a big believer in public goods and have participated in every single Gitcoin Grants Matching round as both a contributor and a grantee. This is why _kitteh and I have decided to donate most of the proceeds of this NFT mint to Ethereum core developers - details:

• 80% of total proceeds (50% from Anthony, 30% from _kitteh) will be donated to this Open Grant that will stream the ETH to Ethereum core developers over time

• The remaining 20% will go to _kitteh for all of his amazing work in creating the NFT and organizing the minting here on Mirror

• There is also a 15% royalty fee on the NFT that will be donated to the same Open Grant in perpetuity

• Holders of the NFT will have access to an exclusive channel in The Daily Gwei Discord server

Alright everyone - let’s get into it!

edition://0x23294eF5BD5ec2fca40904f7Cd4A48e73781f207?editionId=0&editionOpenSaleId=3&version=allocated_4

_kitteh and I would like to extend a big thank you to the Mirror team for all of their hard work in helping us make this NFT mint happen on their platform - they were awesome and easy to work with!

If you’re new to The Daily Gwei, be sure to subscribe to both the newsletter and the YouTube channel to keep up with all things Ethereum. It’s completely free and always will be.