Citigroup analysts believe that the Merge update, which is scheduled for September, will reduce the energy intensity of the Ethereum network, transfer the asset’s emission to a deflationary model, and “pave the way for a more scalable future through sharding.”
According to them, the merger of the main crypto network with the Beacon Chain is one of the five stages of the planned Ethereum modernization. The Merge can increase blockchain throughput by 10% by reducing the block time from 13 to 12 seconds.
The update also lays the groundwork for the next upgrade, the Surge, which will allow Ethereum to process up to 100,000 transactions per second. The effect is planned to be achieved through the use of sharding technology.
According to the company analysts, the transition to the Proof-of-Stake (PoS) consensus algorithm will lead to a reduction in the volume of Ethereum emission by 4.2% per year.
