{"id":10343,"date":"2024-01-23T16:58:04","date_gmt":"2024-01-23T16:58:04","guid":{"rendered":"https:\/\/coinengineer.io\/blog\/?p=10343"},"modified":"2024-01-23T16:58:30","modified_gmt":"2024-01-23T16:58:30","slug":"ethereum-merge-update-could-impact-eth-supply","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/ethereum-merge-update-could-impact-eth-supply\/","title":{"rendered":"Ethereum Merge Update Could Impact ETH Supply"},"content":{"rendered":"<p data-sourcepos=\"5:1-5:250\">According to <strong>Luke Nolan<\/strong>, who researches Ethereum at <strong>CoinShares<\/strong>, the upcoming merger update could potentially impact ETH supply. The analyst believes that this could lead to a decrease in gas usage and, therefore, a decline in the amount of ETH burned.<\/p>\n<blockquote>\n<p data-sourcepos=\"5:1-5:250\">You might like: <a href=\"https:\/\/coinengineer.net\/blog\/what-is-cryptography-and-how-does-it-work\/\"><span style=\"text-decoration: underline;\"><strong><em>Cosmos Rejects Atom Inflation Reduction<\/em><\/strong><\/span><\/a><\/p>\n<\/blockquote>\n<p data-sourcepos=\"7:1-7:496\">Currently, all <strong>ETH<\/strong> used to pay gas fees for transactions is burned. Nolan said: &#8220;Transactional call data makes up 90% of the costs that Layer 2s pay in terms of gas fees. However, after the merge update, <strong>Layer 2<\/strong>s can use the new blobspace mechanism, which has significantly lower gas costs, instead of sending their data through calldata. This means that gas prices could fall to lower levels as Layer 2s gradually transition to using this new<strong> blobspace mechanism<\/strong>, which means less ETH is burned.&#8221;<\/p>\n<h2 data-sourcepos=\"7:1-7:496\"><span style=\"font-size: 75%;\">The decrease in Ethereum\u00a0burning could impact the growth of ETH supply<\/span><\/h2>\n<p data-sourcepos=\"9:1-9:198\">According to Nolan, the potential decrease in <strong>ETH<\/strong> burning could impact the growth of ETH supply. However, the impact of the merge update and the blobspace mechanism could be offset by other factors.<\/p>\n<p data-sourcepos=\"11:1-11:527\">Nolan highlighted that Layer 1 demand is significantly driving deflation and that &#8220;even very high blob usage would have a low impact on circulating supply,&#8221; saying: &#8220;Even if we see gas prices drop as Layer 2s adopt blobspace, there is no real concern that Ethereum will become significantly inflationary.&#8221; He added: &#8220;The goal of the merger update is to reduce gas fees for users transacting using roll-ups and to pull users back to the network because of lower transaction fees, so more activity generally means more gas usage.&#8221;<\/p>\n<p data-sourcepos=\"13:1-13:372\">According to Nolan, the merge update&#8217;s mainnet activation could happen as early as March of this year. He said: &#8220;Ethereum core developers are expecting the mainnet activation of the Merge upgrade at least one month after Holesky. So at least in March, or probably later. It&#8217;s hard to give a firm timeline because testnet errors have emerged and have changed the timeline.&#8221;<\/p>\n<hr \/>\n<div id=\"chat-history\" class=\"chat-history-scroll-container ng-tns-c1304298479-2 ng-trigger ng-trigger-resetChat show-bottom-shadow\">\n<div class=\"conversation-container ng-tns-c1304298479-2 visd-patch ng-star-inserted\">\n<div class=\"ng-tns-c3288265132-24\">\n<div class=\"response-container ng-tns-c3311575876-25 response-container-has-multiple-responses\">\n<div class=\"presented-response-container ng-tns-c3311575876-25\">\n<div class=\"response-container-content ng-tns-c3311575876-25\">\n<div class=\"response-content ng-trigger ng-trigger-responsePopulation ng-tns-c3311575876-25 ng-animate-disabled\">\n<div class=\"markdown markdown-main-panel\" dir=\"ltr\">\n<p><em>Also, in the comment section, you can freely share your comments and opinions about the topic. Additionally, don\u2019t forget to follow us on\u00a0<a href=\"https:\/\/t.me\/coinengineernews\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Telegram<\/strong><\/a>,\u00a0<a href=\"https:\/\/www.youtube.com\/@CoinEngineer\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>YouTube<\/strong><\/a>\u00a0and\u00a0<a href=\"https:\/\/twitter.com\/coinengineers\"><strong>Twitter<\/strong><\/a> for the latest news and updates.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>According to Luke Nolan, who researches Ethereum at CoinShares, the upcoming merger update could potentially impact ETH supply. The analyst believes that this could lead to a decrease in gas usage and, therefore, a decline in the amount of ETH burned. You might like: Cosmos Rejects Atom Inflation Reduction Currently, all ETH used to pay<\/p>\n","protected":false},"author":1,"featured_media":10344,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,2],"tags":[1342,105,196,3868,2038],"class_list":["post-10343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-news","tag-coinshares","tag-ethereum","tag-layer-2","tag-luke-nolan","tag-mainnet"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ethereum Merge Update Could Impact ETH Supply - Coin Engineer<\/title>\n<meta name=\"description\" content=\"According to Luke Nolan, who researches Ethereum at CoinShares, the upcoming merger update could potentially impact ETH supply.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/ethereum-merge-update-could-impact-eth-supply\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ethereum Merge Update Could Impact ETH Supply - 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