Merge Update has Turned Ethereum Blockchain Network Profitable
Before the Merge protocol update and the ongoing decrease of supply, Ethereum, like every other cryptocurrency network on the market, was the “unprofitable” blockchain. Nevertheless, the circumstances have changed.
A blockchain’s “profitability” differs from the earnings of a corporation in conventional finance. Fundamentally, it is the removal of fresh supply from fee burned that determines how profitable the network is.
Specifically, Ethereum is currently the only deflationary crypto among the 10 leading cryptocurrencies on the digital currency market. The blockchain’s profit does not assist its owners or new buyers. On the contrary, deflation might be seen as a major future potential growth element for crypto. By forcefully reducing the asset’s liquidity, third parties or decentralized systems may generate a liquidity crunch in which the shortage of supplies and increased demand drive the asset’s value to hit insane levels.
While the rising price of Ethereum will benefit investors and speculators, dApps users and programmers will be forced to conduct trades with higher fees and the possibility of network congestion. Sadly, Ethereum asks users to shell out close to $15 per network activity during peak network usage.
— Token Terminal (@tokenterminal) November 15, 2022
Nevertheless, varied foundations and initiatives are continually working to improve Ethereum’s scalability by introducing new payment processing methods or innovative Layer 2 channels that relieve some of the stack on the primary network and realize higher processing ability, faster processing times, and negligible fees. While writing this report , Ethereum stays deflationary, although the network’s profits is returning to $0 owing to a decrease in the burning rate.