Ever since it was announced, it was the talk of the blockchain world due to its massive implications. It was the subject of endless articles, debates, and speculation. But now, after being announced last year, the Ethereum merge has finally taken place.
The Ethereum merge took place at 2:45 a.m. ET on September 15, 2022. Henceforth, the Ethereum blockchain, which is one of the biggest blockchains in the world, operates using a proof-of-stake protocol and not a proof-of-work one. This, in many ways, represents a new era not just for NFTs as a sector but blockchain as a whole.
The Aftermath of the Merge
Ever since the Ethereum merge took place, there have been a few historic firsts, especially within the NFT sector. Before the merge, there had been a lot of talk about how it would lead to a more eco-friendly NFT landscape given that less energy would be used. According to the Crypto Carbon Ratings Institute, energy use by the Ethereum blockchain will go from 23 million megawatt-hours per year to only 2,600 megawatt-hours, representing a drastic reduction.
That new landscape has finally arrived as the first set of eco-friendly NFTs has already been minted on the Ethereum blockchain. Some of these are Merge Apes, a 10,000 NFT collection that makes reference to Vitalik Buterin’s commentary on the Bored Ape Yacht Club and TheTransition: First NFTs Proof-of-Stake, which includes some of the first assets minted on the new blockchain.
Soon after these NFTs were listed, they saw immense support from the public not only because they have historical significance within blockchain but also because of their eco-friendly nature. Now that the merge is complete, we are looking at a new era where many of the NFTs to come out of the industry will be better for the environment.
But while that is certainly something to celebrate, the first few days post-merge have not been entirely smooth sailing. For one, the price of Ethereum took a bit of a dip after the merge was complete. The native token of the ecosystem had been trading above $1,600 per unit right before the merge but dipped below $1,500 post-merge and has been hovering slightly above that amount.
But the biggest issue on people’s minds is the potential treatment of Ethereum-based tokens after the merge. When it comes to regulatory bodies and blockchain-based assets, there is an age-old controversy about whether or not they are securities and how they should be treated in the eyes of the law.
When asked about the Ethereum merge, the Securities and Exchange Commission’s Chairman Gary Gensler made comments that led some to believe that Ethereum assets’ status might change due to the merge.
“From the coin’s perspective…that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others,” he said, referring to a common test used to determine whether or not an investment contract exists.
While this does not in itself mean that Ethereum-based assets will be treated as securities overnight, it does show that the merge is only the beginning of a new era in blockchain and that there is more to come.