The Ethereum Merge has occurred. Its purpose is to transition the blockchain from proof-of-work (PoW) to proof-of-stake (PoS), which is more environmentally friendly and presumably more secure (PoS). But what does this signify for holders of NFTs？
The Merge will not enhance network capacity, and gas prices are unlikely to fall, but the update may pave the road for lower gas payments in the future via sharding. According to experts, NFTs based on Ethereum wont be unaffected.
According to Ankush Agarwal, main architect of Co:Create, one implication to consider is duplicating NFTs.
“If projects are not updated, the 'old NFTs' will be [duplicated on any forked] PoW chain and may cause some confusion.” All big companies — Coinbase, OpenSea, and LooksRare — have stated that they will only support the PoS chain, thus the impact should be limited.
Proof-of-stake Ethereum changes the NFT energy narrative
As a result of the Merge, Ethereum's energy consumption lowers by 99.9%, which may have an impact on NFTs because it undermines a main narrative advanced by token opponents.
“There has been an unbelievable amount of disinformation about the energy usage of NFTs, but this migration will put even the most outspoken critic's concerns to rest,” said Jonathan Victor, Protocol Labs' head of Web3 and NFTs.
According to Jack O'Holleran, CEO of SKALE labs, some of those critics include Hollywood personalities and game developers in San Francisco who are energy and environmentally sensitive.
SKALE's multi-chain network works with companies and artists to mint and administer Ethereum-based NFTs. The first question major brands ask is whether their equipment is energy efficient, mostly because “they care about their optics,” according to him.
Ethereum has been generally characterized as an energy-inefficient environment, which has discouraged many from constructing NFT projects on Ethereum and instead going to other chains such as Solana and Polygon. Nonetheless, Ethereum is the largest and most widely used blockchain for NFTs.
Because most sectors are aiming for net zero emissions by 2050, the Merge might bring ETH much closer to this goal.