Ethereum Mining and Staking Revenue Halved in September

After Ethereum’s transitioning from the proof-of-work (PoW) mechanism to the proof-of-stake consensus dubbed “the merger”, there was a significant drop in Ethereum (ETH) mining and staking revenue.

According to data from The Block Research, miners and validators on the Ethereum network generated $406.86 for the month of September. This figure represents a 51.7% drop from that of August.

Details from the data further reveal that a large chunk of the revenue ($299.85 million) was from miner subsidy, it generated $72.02 million from stakers, $22.28 from transactions fee, and $12.7 million from uncle rewards.

Ethereum’s upgrade from the proof-of-work mechanism to the proof-of-stake consensus was completed on September 15. The upgrade ended an era where miners with their powerful,  energy-hungry graphics processing unit (GPU) hardware were required to validate a transaction. 

Ethereum Transition to Staking

The former validation model of Ethereum has now been replaced with staking where validators stake a large amount of ETH as collateral to produce blocks on the network. Staking, which requires less computing power and energy is one of the hallmarks of Ethereum’s “the merge”.

The merge not only affected Ethereum’s mechanism, but it also affected its tokenomics as the network will reward validators with fewer tokens than it did miners. Interestingly, there are indications that the SEC is now mulling the idea of categorizing ETH as securities as staking is now the new order.

The merger is described as the third most significant event in the crypto industry. According to Joseph Lubin CEO of ConsenSys, this event follows the invention of Bitcoin (BTC) in 2009 and that of Ethereum in 2015. The upgrade generated a tonne of buzz both inside and outside the cryptocurrency sector.

According to some supporters of Ethereum, the characteristics of Ethereum after the merge make it a more reliable store of value than Bitcoin.

In fact, Kyle McDonald, an artist, and an independent researcher have predicted that Bitcoin‘s price will fall after Ethereum‘s “The Merge”. Kyle says investors and regulators will soon realize that the proof-of-work mechanism was really never necessary and thus might be regulated away resulting in the crash of the King coin.

Notably, the merger significantly lowers energy consumption.