The long-anticipated Ethereum upgrade is only weeks from being implemented, and most of the crypto community is going wild as the ‘Merge’ could finally bring peace to the crypto galaxy far away. Many analysts compare the current situation to when El Salvadore adopted Bitcoin as a legal tender in the autumn of 2021. Similar to the turbulent market conditions that the crypto industry has been experiencing for some time now, the end of 2021 looked grim, with zero promises of immediate recovery.
However, El Salvador’s president, Nayib Bukele’s bold move was enough not only to reverse the market’s trajectory but also to contribute to one of the best bull runs in crypto history yet. By juxtapositioning both scenarios, it would not be too farfetched to suggest that the ‘Merge’ could be a perfect storm to pull out the crypto market from the bear pit and set the course into a prosperous future.
In today’s editorial, I would like to consider its possible impact on DeFi Dapps built on the Ethereum blockchain and upcoming players like the Petrousus (PSUS) project.
A New Hope: ‘The Merge’?
Currently, all the Dapps built on the Ethereum blockchain utilise a Proof-Of-Work (PoW) model via a practice known as mining, which is an energy-intensive approach in which miners direct massive amounts of computer energy to solve complex mathematical puzzles to receive blocks for new ETH. After the ‘Merge’ is complete, the mining practice will end, transitioning to the Proof-Of-Stake (PoS) model, resulting in less computational power used to create new ETH.
As a result, the network will become more environmentally friendly, attracting more projects to use the Ethereum blockchain. In the past couple of months, Ethereum lost market share to competing blockchains like Solana or Cardano, which offer similar functionality and utility but with smaller fees and faster transactions.
However, many analysts believe that with ‘The Merge,’ the staking could lock up much ETH already in circulation, leading to a deflationary effect on the cryptocurrency, keeping supply lower while demand remains constant or increases. This ultimately means that Ethereum 2.0 is that of scaling. According to Vitalik Buterin, the network could process 100,000 transactions per second, a considerable increase from the current state.
Nonetheless, it should be noted that ‘The Merge’ will not expand the network capacity – this is why it won’t result in lower gas fees. However, some scaling solutions in development are designed to do just that, most of which are targeted at layer 2s.
So What About The Petrousus Project?
On the surface level, there will be no immediate change to the Petrousus project for several reasons. One such is that the Petrousus token is not powered by the Ethereum blockchain but by the Binance Smart Chain (BSC). Since its inception in early 2020, the BSC has recommended itself as a viable alternative for DeFi Dapps. At the time of writing, it is ranked third by market capitalization, skipping ahead only Ethereum and Bitcoin, which both had a head start for more than ten years.
BSC enjoys such overwhelming success because it is a cost-effective and inexpensive alternative that, unlike Ethereum, has already solved scalability issues. On top of that, it can process more transactions in less time than Ethereum, and its smart contracts may be easily implemented to create various DeFi solutions.
However, it should be emphasised that ‘The Merge’ could act as an anchor to pull a DeFi ship afloat. Even though blockchains like Solana, Cardano and Binance Smart Chain have claimed their share of the DeFi market, Ethereum still reigns supreme. And with the negative publicity the DeFi sector has undergone in the past couple of months, good press coming from a rival blockchain could turn things upside down.
This becomes especially apparent if we consider that the Petrousus project wants to build an all-encompassing DeFi ecosystem where users can seamlessly engage in various DeFi activities. After numerous scandals and rug pull, many users are hesitant to return to DeFi, regardless of its built blockchain.
What To Make Of It
Although no one knows what the future holds, one thing remains adamant: only innovation and moving forward could win back the trust of the crypto flock, especially in DeFi. With crumbling NFTs and a general sentiment of uncertainty, the long-anticipated upgrade to the second largest crypto asset by market capitalization could be what the industry needs to usher into a new chapter.
To find out more about Petrousus (PSUS), visit the links below:
Source: Popular Token
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