I want to go over some things to help dispel common FUD.
Read through this to help understand ETH issuance.
If anyone wants help with staking, Rollups, or mumbo jumbo ask in a comments!
- Ethereum (Proof of Work) creates roughly 13,500 new Ether per day that gets paid to miners for security
- That has a value of approx $27M USD at today's price
- Miners have high costs so sell most of what they earn
If ETH POW hit $10,000 there would be $135,000,000 of new coins for sale each day that need to be bought first before the price can go up another cent
Right now since we're crabbing around $2000 that means miners are selling approx $27M per day and people are buying $27M per day at a crabs pace.
- Ethereum (Proof of Stake) creates roughly 10% as much Ether as POW, there will be no more mining
- That has a value of approx $3M USD at today's price
- Stakers have no maintenance costs so often compound their interest instead of selling
- Block times are decreasing from 13s-ish to always 12s
- POS uses 99.95% less electricity but does nothing for scaling or fees
The Beacon (POS) chain went live last December. Since then a total of 12.5M ETH has been locked up in staking and lately that has been accruing approx 1500 ETH/day in new issuance.
Only a 4 validators are able to enter or exit a spot every epoch. An epoch happens every 32 blocks - there are 225 epochs per day so a maximum of 900 validators can stake or unstake in one day.
Since it requires 32 ETH to be a validator that means a max of 28,800 ETH can be staked or unstaked each day.
FOR 6 MONTHS AFTER THE MERGE NO ONE WILL BE ABLE TO ACCESS THEIR STAKED COINS
Not having miners for 6 months is like taking 13500x180x2000 $5Bln of sell pressure off the market!
But that means stakers have over 12 months of banked stake ready to withdraw all at the same time!
Assuming stakers were getting 1500 ETH/day the entire time (an over estimation) they'll have almost 550,000 ETH to sell! That's like $1Bln at today's price!
They'll be able to sell a maximum of 28,800 Ether per day or create about $57M of new sell pressure for at most 20 days. That's like turning 2x POW issuance on for three weeks after not having a drop for 6 months.
After 20 days of 2x POW issuance, ETH will become ultra scarce again.
Only about 1500 ETH/day can reach the markets, about $3M, into an environment where people are paying $27M/day in a bear market.
Next time the price inches towards $10,000 that means $15M new Ether will be entering the markets instead of $135M. The majority of fees are burned leading to approx $10-30M taken out of circulation every day. ETH will be more scarce post merge than ever before, and I don't have enough!
To worry about a crash in price is a valid concern. Miners haven't added that kind of sell pressure since ETH was worth $4000! But after the merge all transaction tips go to stakers adding 5-10% onto today's APR, and if half of stakers leave that'll add another 5-10% onto what the remaining get. Staking ETH is already enticing to me now so if it can offer 20% everyone will want to do it.
What do you think will happen? Will everyone stake or unstake?
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