The Ethereum triple halving date is close. This is after the Ethereum Goerli testnet successfully merged on 10th August 2022 at around 1:45 AM UTC. That was the last test before The long-awaited merge. ETH was up 13% over 24 hours leading up to the test Merge and was trading at $­­­­1,907 at the time.

Ethereum has had to pass three phases of tests and trials in order to be considered ready for a merge to the Ethereum mainnet.

✅ Ropsten(completed on June 8)

✅ Sepolia(completed on July 6)

✅ Goerli (completed on August 10)

Now that Ethereum has passed all its tests, the Merge is expected to come sometime in mid-September 2022. 

Why does the Ethereum Merge matter?

 Source code branch 3D rendering

The Merge will be one of the biggest events in crypto history. Ethereum will go through a major software update that will move it from proof-of-work to proof-of-stake.

As a result, the Ethereum blockchain’s energy consumption will be reduced by 99 per cent. Each node on the network will consume about as much energy as it costs to power a personal computer.

This is significant since the environmental impact of cryptocurrencies has received significant criticism. 

There are two ways to mine cryptocurrencies: PoS and PoW.

  • Most traditional cryptocurrencies, like Bitcoin, use a proof-of-work algorithm. In order to mine cryptocurrency using the classic PoW algorithm, a large number of computers and a lot of electricity are needed.
  • However, with PoS, any cryptocurrency owner, regardless of their holdings, is able to use their tokens as collateral to support blockchain development. 
  • Upon completion of the pledge, the user is rewarded with a fixed percentage of the pledged assets.

But all of this will also go through a phenomenon people are calling…Triple Halving!

What is The Ethereum Triple Halving?

Let me explain.

  • Ethereum will use 99.9% less energy moving from PoW to PoS
  • Less energy to run = fewer block rewards for stakes
  • The annual emission of new ETH will drop from 4.3% to 0.4%
  • We’ll go from 13,000 new ETH a day to 1,300 new ETH a day. That’s ~10x less

The emission rate will drop from 4.3% to 0.4% which is about 3 “halvings”. Hence why it’s being called The Triple Halving.

A “halving” is something Bitcoin goes through every 4 years. It cuts mining rewards in half to cut down inflation from new Bitcoin being mined. The interesting thing is Bitcoin has gone through 3 of them so far. Each time it’s led to big bull runs. Just take a look…(post-halving is shaded in blue)

timeline of The Ethereum Triple Halving

Ethereum is going through all 3 of these at once when the Merge happens. 

The Ethereum Triple Halving And Ethereum Deflationary Mechanism

There are 2 other factors that make Ethereum deflationary:

Deflation 1: Ethereum’s burn mechanism – EIP-1159. No, it’s not R2D2’s cousin.

It’s another software update that went live last year. It burns a portion of every transaction fee and takes it out from the total supply.

Deflation 2: Staked ETH lock-up periods. There is currently ~$25b worth of ETH being staked (10% of the entire supply). People stake their ETH with validators to earn yield.

This $25b, and anything else that’s added, will be locked for 6-12 months after the Merge. Meaning it cannot be withdrawn and sold.

Conclusion

Annual ETH emission dropping from 4.3%–>0.4% + EIP-1159 burn mechanism + $25b worth of ETH locked for ~12 months = a whole lot of deflation.

Ethereum rose to a 2-month high this morning, as optimism surrounding the much-anticipated merge continues.