How will the Ethereum 2.0 Merge affect the DeFi, Web 3 ecosystem?

The crypto community is buzzing with the most important event in crypto history since the introduction of the Bitcoin whitepaper. ETH is the coin that has the second highest Market capitalization after Bitcoin. When the ETH coin ICO took place, the crypto landscape was in its nascency. The technology of the day and the undying ethos of decentralization led to the development of the proof of work consensus protocol for adding a new block to the chain.

The problem arises here. PoW chains require a substantial amount of energy to add a new valid block to the chain. This causes scalability and energy cost issues, a primary difficulty in making the coin a mainstream payment gateway. Similar chains like Solana, Avalanche, and BSC are trying to occupy this space. Using the Proof of stake consensus protocol, the transaction fees can be cut down drastically.

The ETH community understands this dilemma. They are concerned that ETH coin DeFi activity will eventually become too costly to handle and that other coins will take over. To safeguard against this future, ETH has decided to launch ETH 2.0, with a PoS consensus algorithm at its helm. This Merge will cause a major shift in the crypto landscape. Currently, about 60% of the market cap of crypto is occupied by PoW coins. ETH merge will shift that data point towards PoS consensus becoming the norm.

Future of Altcoins

The dominant use case of top crypto coins is the use case as payment gateways. The market conditions dictate that BTC places itself firmly as a store of wealth. Starting from ETH, every subsequent coin has tried to solve the problem of scalability. ETH has given developers the building blocks to build APIs but high transaction gas fees are restricting the growth.

Altcoins fashioning themselves as ETH killers are providing solutions to the problem. SOL provides more than 100,000 TPS, ETH only provides up to 30 TPS. Other chains like ATOM and DOT are solving interoperability by allowing multi-chain interaction.

The ETH Merge will solve a lot of the mentioned problems in the long run, so there is bound to be an effect on the altcoin ecosystem. Developers might adapt the ETH Beacon chain as a building platform exclusively. Other competing chains like BSC and SOL will need to hold onto their individuality and keep their community happy in order to exist in a post-Ethereum Merge world.

DeFi landscape post Merge

DeFi ecosystem will permanently be changed as soon as people who have staked ETH on the Beacon chain start receiving staking rewards. The run to find the ETH killer coin has compelled the Ethereum foundation to take this step of undertaking the Merge. Building dApps with smart contract applications had revolutionized the crypto industry and mining ETH made many fortunes. This new generation of dApps deployed on beacon chain contracts will make it easier for developers to deploy APIs. A boom in new projects is being built on top of Ethereum, the second biggest Crypto asset by the Market cap.

Investing your ETH holdings into a staking pool will instantly make your stored ETH into a fixed deposit yielding up to 10% returns according to some estimates. Hope amongst the crypto community is this will draw a lot more people to ETH and thus web 3.0 adoption a bit further.

Cronos World emerging into the ETH bull run.

Cronos World is a platform that is created on Cronos Chain and deployed on all the major coins like ETH and SOL and BSC.

Deployment of the Ethereum PoS chain will mark a cascading moment in the history of DeFi and Web 3. About 60% of DeFi is on the Ethereum chain and this Merge will enable a more democratic representation with smaller investors locking their ETH in liquidity pools and accruing returns. A steady increase in mainstream crypto adoption means new and exciting projects that need their logistics of launch and functioning sorted.CrownPAD, our premiere launchpad product will launch alongside the ETH merge and will ride out the bull run into new projects debuting every week.

Join the journey, Explore Cronos World!!

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Cronos World

Cronos World

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A world with a Launchpad, a Marketplace and a DEX on Cronos chain. Get ready for the complete end-to-end Cronos experience. https://www.cronosworld.io/