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The Ethereum The Merge update, scheduled for late September, will be one of the most anticipated events due to the predicted bullish impact on the asset price. Banking giant Citigroup believes the upgrade could have several important implications for the blockchain.
The bank’s study argues that once the upgrade is launched, it could lead to lower energy intensity, turn Ethereum into a deflationary asset, and achieve scalability through sharding.
According to bank analysts, the transition to Proof-of-Stake (PoS) can also reduce the total emission of Ethereum by 4.2% per year. And once Ethereum becomes a deflationary asset, the cryptocurrency will become more important as a store of value.
The Ethereum blockchain with high throughput and 12 second block time will ensure further reductions in fees.
Citi noted that how the Ethereum PoS network will attract cash flows using new methods not available on the blockchain at the moment.
Market participants expect the Merger to act as a catalyst to push Ethereum towards becoming an “institutional-grade global asset” with an upward price momentum.
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