An Event Study of the Ethereum Transition to Proof-of-Stake

Abstract

On 15 September 2022, the Ethereum network adopted a proof-of-stake (PoS) consensus mechanism. We study the impact on the network and competing platforms in a two month event window around the Beacon chain merge. We find that the transition to PoS has reduced energy consumption by 99.98%. Miners have not transformed into validators, and total block reward income (in USD) has fallen by 97%, though transaction fees (in ETH) for Ether have increased nearly 10%. The Herfindahl index for the top 10 is 1009; the network is 19% less concentrated after the merge. Ethereum supply growth has been deflationary since the merge. The time between consecutive blocks is now steady at 12 s and transactions per day are up 7.0%. On Polygon, Matic fees rose but token fees fell. Polygon also slows, processing 3.3% fewer transactions per day. Solana’s fees fall by $0.0003, and transactions per day are down 48%. Stablecoin transfer volumes fall on Ethereum and Polygon, but rise on Solana.

Exemplary Ethereum Development Strategies Regarding Security and Gas-Saving

“…The Ethereum organization claims that around 99.95% less energy is consumed by the network now. This is in line with Kapengut and Mizrach [25], as they state that the consumed energy by the Ethereum network was reduced by 99.98% with the switch. Some misconceptions were that the network would be faster afterwards and that the gas fee would become lower.…”

Universal skepticism of ChatGPT: a review of early literature on chat generative pre-trained transformer

“…The early research on ChatGPT suggests a range of potential benefits and drawbacks across various fields such as healthcare, business, psychology, and computer science, among others. Like the beginnings of the internet or the creation of digital assets (Lawuobahsumo et al, 2022 ; Kapengut and Mizrach, 2023 ; Watters, 2023 ), ChatGPT and its underlying technology have the opportunity for both positive and negative disruption. While many scholars have raised concerns about the impact of ChatGPT on employment opportunities in different industries, there are also significant ethical considerations to be addressed before widespread implementation can occur.…”

Veritas: Layer-2 Scaling Solution for Decentralized Oracles on Ethereum Blockchain with Reputation and Real-Time Considerations

“…When the contract receives the three responses, they are aggregated and sent back to the requesting contract on the Ethereum main net if the aggregated amount deviates by more than Dev from the last data point. The total number of requests to the Ethereum main net for Veritas can be determined by Equation ( 9) and the total cost can be determined by Equation (10). In comparison to Chainlink, which aggregates responses on the main Ethereum chain, the number of requests returned assuming the same parameters would be computed using Equation (12).…”

“…To that end, we propose Veritas, a layer-2-based decentralized oracle for Ethereumbased smart contracts. With Veritas, the Oracle nodes are part of a sidechain network based on the same consensus rules as Ethereum (proof of stake as of 2022) [9,10]; this achieves a high level of security and transparency desired for decentralized Oracle systems. All jobs and activities performed by the nodes are orchestrated by a central smart contract living on the Veritas sidechain; this includes processing jobs, assigning jobs, receiving and aggregating results, and penalizing dishonest Oracle nodes.…”

“…After that, the total gas cost for a real-time job on Veritas (VeGC RTReq ) is calculated using Equation (10).…”