All eyes on Ethereum: The blockchain is in the final phase of the transition to proof of stake. The consensus change known as merge represents the most significant network upgrade in the history of Ethereum – and makes the ecosystem boil up in advance.
A record for the Ethereum Name Service
With two million registrations, the Ethereum Name Service (ENS) has reached a new record level. It is striking that it took five years for the first million. It then went from one to two million within three and a half months. The rush was particularly high in July: according to Dune Analytics, around 380,000 new addresses were registered last month.
The Ethereum Name Service can be used to register URL addresses for wallets on the Ethereum blockchain. Domain name mapping makes it easier to interact with wallet addresses and decentralized applications. The ENS domain names are stored using smart contracts and sold as NFTs via trading venues such as OpenSea and the ENS site.
In addition to the merger, the recent moderate transaction fees – gas fees – are likely to have favored the increase. The show business celebrity also ensures media attention. Paris Hilton, Snoop Dogg, Jimmy Fallon and even Anthony Hopkins: they all registered a domain.
Staking demand increases
Record also for the ether deposits in the deposit contract of the Beacon Chain. With 13.3 million ethers staked, a new all-time high was set. In 2022 alone, the number of staked ethers increased by 57 percent.
Number of staked ether and ETH reserves on stock exchanges / Source: Glassnode
On the other hand, ether holdings on stock exchanges are approaching a new annual low of around 21 million ETH. In the wake of the sell-off wave in May, the exchange reserves have still filled up. Since July, stocks have fallen again – demand is increasing.
Affordable Gas Fees
At the same time, the gas fees have also leveled off at a normal level in recent weeks. Currently, according to BitInfoCharts, a transaction costs an average of 0.0014 ETH – about 2.50 US dollars. At the beginning of the year, the fees still ranged from $ 30 to $ 50.
History of transaction fees / Source: BitInfoCharts
A rush at the Ethereum Name Service, rising staking demand, declining stock market holdings and falling gas fees: the merge euphoria is already emerging at the on-chain level. It remains to be seen whether the mood will last even after the merge in four weeks.
More about the background of the merge and the consequences for the Ethereum ecosystem in the current issue of BTC-ECHO magazine.