Where ETH is going from here

Author

Logan Cloak
May 27, 2022

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Now for the news. Get caught up from the past week in 10 minutes or less:

  • What the ETH Merge could do to the price of ETH? 📈

  • a16z's new crypto fund 💰

  • Scams abound 🤬

  • More stories from the week 📰

Merge Incoming

At an ETH developer summit in Shanghai last week, Vitalik Buterin said that "If there are no problems, then the merge will happen in August".

We've discussed The Merge before here, but if you're unfamiliar, we'll do a quick refresh.

The Ethereum Mainnet will eventually merge with the Beacon chain, transitioning from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism. This will eliminate the need for mining and will secure the network with staked ether, making the system faster and more energy-efficient.

But will this have an effect on ETH's price? Well, we can't say for certain, but we can share what we've seen.

First, we are seemingly entering a bear market so all of crypto could get crushed even more. And Ethereum has hit some significant snags recently testing the Proof-of-Stake system.

But...

Post-merge, ETH issuance will significantly slow down, and ETH could become deflationary.

And the math then is simple, if demand keeps up, and supply is lower, the price could go up.

On top of that, fees earned by miners in the PoW system will now be passed onto stakers who could earn anywhere from 7%-12% APR initially from gas fees. And if investors see they can earn yield, demand for ETH could increase even more.

a16z's New Fund

On Wednesday, Andreessen Horowitz announced their largest crypto fund to date - a whopping $4.5B fund investing in the "golden era of web3". Bringing all a16z crypto funds to a total $7.6B.

Of this new fund:

  • $1.5B will be directed toward seed-stage investments

  • $3B will go to other venture investments

And focuses of the investments range from web3 games, to NFT communities, bridges, ZKproofs, and more.

The fund comes at an odd time, however, as markets are starting to trend downward, and many venture capitalists are telling portfolio companies to tighten up their spending and prepare for a bear market. But, with $4.5B going to early-stage companies, it doesn't exactly feel like bear market.

Of the timing, Arianna Simpson, General Partner at a16z had this to say to CNBC: "Bear markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity"

Scams Abound

Scammers and hackers are an unfortunate part of any new ecosystem. And recently, they have been targeting some familiar names.

1/ Seth Green, who you may know from Family Guy, Austin Powers, or a myriad of other projects was recently the target of a phishing scam that stole several expensive NFTs from his wallet.

The big problem is that Green was planning on using his Bored Ape as a character in his new show White Horse Tavern. However, now that he does not have ownership of the NFT, he cannot legally make the show because he does not own the IP.

2/ The famous digital artist, Beeple, had his Twitter account hacked on Sunday, telling followers to mint NFTs at the link in his tweet.

Unfortunately for his followers, the link led them to a place that siphoned crypto from their digital wallets. In total, over $400,000 was stolen from his followers and it wasn't until later in the day that he regained control of his account.

3/ While no scam has happened yet, the infamous 'Pharma Bro' Martin Shkreli was released from prison last week and took to Twitter to hold a Space where he talked about crypto & prison. Feelings in the crypto community were mixed about his comments and the fact that he seemed to find his next interest.

More stories from the week

Glossary

We're confused too. We're here to help decrypt the crazy world of crypto.

  • bridges - a tool that lets you port assets from one blockchain to another (More here.)

  • stake - a way of earning rewards on your crypto assets. In Ethereum, staking is the act of depositing 32 ETH to activate validator software. As a validator you’ll be responsible for storing data, processing transactions, and adding new blocks to the blockchain. (More here.)

  • ZKproofs - stands for zero-knowledge proofs. In a zero-knowledge proof system, the prover is able to prove to the verifier that they have the knowledge of a particular piece of information (such as the solution to a mathematical equation) without revealing the information itself. (More here.)

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Disclaimer: Rollfi Inc does not guarantee and is in no way responsible for the accuracy of information provided in this message. All information is provided “AS IS” and with all faults. Data presented here may not reflect all activity in the market.