Here is why strong post-Merge fundamentals could benefit Ethereum price

Potential bullish factors for the Ethereum price include an increase in staked ETH, a lucrative yield on liquid staked ETH tokens, and deflationary tokenomics.


With the switch to a proof-of-stake (PoS) protocol, the Ethereum blockchain has provided developers and investors with new options, such as the destruction of Ether. Nowadays, staking is used for Ethereum transaction verification instead of mining.

While both mining and staking affect the supply and price of Ether, staking has a different effect than mining. The opposite of mining’s inflationary effects on Ether is predicted to occur as a result of staking.

Given that supply is a major factor in determining cryptocurrency prices, an increase in the total amount of funds locked in Ethereum contracts may also contribute to a sustained appreciation of ETH in the long run.


Since the Merge, 1,164.06 ETH have been issued, which is a greater proportion of total Ethereum than was burned. This means that almost all of the newly created supply has been burned through the new burn mechanism since the Merge, which is expected to become deflationary as network usage increases.

Analyst at Bitwise Anais Rachel predicts that by the end of this week, all ETH issued after The Merge will have been destroyed.

1 By the end of this week, it’s possible that all ETH created after The Merge will have been destroyed (

On October 27, 2022, Anais Rachel (@Anais Rchl) tweeted:
The tokenomics are designed to make Ether deflationary, and the chart only goes back 43 days, but that’s plenty of time for the token economy to take effect.

The switch from proof-of-work to proof-of-stake in Ethereum is responsible for the decrease. Since the Merge, the total supply has increased by 1,376 ETH, proving that Ether is still inflationary.

Supply change post-Ethereum Merge. Source: Ultrasound Money

Before May of 2020, Sapien Network CEO Ankit Bhatia explained to Cointelegraph how staking affects supply.

In order to limit the number of ethers in circulation, “the retail market would most likely acquire ether from exchanges like Coinbase,” which may allow buyers to instantly stake their purchases.

It appears that the amount of Ethereum that has been locked up has grown. For instance, DefiLlama demonstrates that more than $31.78 billion in Ethereum is currently frozen in escrow.

Total Ether value locked. Source: DefiLlama

All staked tokens in the Ethereum ecosystem, not just those locked by Proof-of-Stake miners, are detailed in data provided by Token Terminals.

Estimated locked tokens per project. Source: Token Terminal

The most popular protocols today are Uniswap, Curve, Aave, Lido, and MakerDao. For comparison, MakerDao has $8 billion in TVL, while Lido only has $6.8 billion.

Ether holders staking their Ether are helping propel Lido to new heights, demonstrating an increased interest in proof-of-stake. Due to the Merge announcement on July 13, Lido’s TVL has risen from $4.52 billion to $6.8 billion as of this writing.

ETH deposited in Lido. Source: Nansen

In the final days of October, the TVL has risen as more and more investors have locked in their Ether holdings.

DeFi protocols see an uptick in TVL and daily active users

There has been a gradual but steady rise in both Uniswap’s TVL and DAUs. When the number of DAUs on a platform rises, the number of TVLs for that protocol usually does, too. Increases in TVL and DAUs are probably due to the attractive Ether staking rewards.

TVL and DAUs for Uniswap. Source: Token Terminal

Growing Uniswap DAUs may lead to more Ether burn from an increase in transactions, and may also aid in removing more Ether from circulation as the platform’s TVL increases. In terms of yearly returns, USD Coin is currently the best Uniswap pair with Ether, at 34.

Top 10 Ether pairings on Uniswap V3 with APY. Source: DefiLlama

Lucrative staking yields

Liquidity providers frequently use Uniswap to exchange Ether for stablecoins. The maximum APY that can be generated from Ether and Tether is 72.20 percent.

To be sure, some staking platforms like Coinbase, Lido, and Frax deal with liquid staking derivatives. The yield could reach 7% per year under these conditions.

According to, the annual percentage yields offered by Lido are 3.9%, Everstake 4.05 %, Kraken 7%, and Binance 7.8 %.

It’s also worth noting that the rate of return changes as a function of the sum invested. APYs tend to be higher for smaller amounts compared to larger ones. The protocol can also affect the yield.

For instance, validators have a higher return on investment than users of cryptocurrency exchanges or pooled staking. Platforms like Lido help smaller ETH holders earn, despite the fact that validators must stake 32 ETH and constantly maintain their nodes.

Ethereum’s TVL could rise as a result of higher yields, the switch to PoS, and rising daily active users (DAUs) of the most popular Ethereum-based decentralized applications.

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Disclaimer: This opinion is not meant to be taken as financial guidance and is presented merely for educational purposes. Crypted Crypto cannot guarantee that it accurately represents the views of the publication. You should always do your own research before making any financial decisions, as every investment and every trade carries some degree of risk. If you cannot afford to lose the money you invest, then you should not invest it.

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