In this article, we aim to explore was the Merge a selling event? Why or why not? Were miners the source of sell pressure? Show any wallets miners have transferred ETH into, along with any other visualizations you think will add to your analysis.
The Merge: What does it mean? Why should we merge?
With the merge, Ethereum makes the transition from proof-of-work (PoW) to proof-of-stake (PoS). The proof-of-work method of consensus on the blockchain relies on the lockup of a staker’s Ethereum. Computing power is required to secure blockchain consensus. This is done by people (miners) who secure the network.
In order to solve the blockchain trilemma, Ethereum has worked on a variety of problems:
Security , decentralization and scalability The blockchain so far has compromised on at least one of these features. However, it is still helpful.
What are the benefits of the Merge?
The Merge allows for decentralization and security by requiring a minimal number of nodes and reducing the amount of work required to run nodes Compared to PoW, PoS requires 99% less energy Through scalability, it opens the possibility of sharding and 100k TPS in the future.
How does it works ?
- Ethereum is deposited into your account.
- Validators stake cryptocurrency with the protocol.
- You receive the staked ETH in the form of a liquid (sellable) wrapper.
- You will earn interest on that. If you want, you can trade in these liquid wrappers.
Ethereum Merge: When Did It Happen?
A long-awaited Merge occurred on Sept. 15 at 6:42:42 UTC at block 15,537,393, bringing together the Ethereum mainnet execution layer with Beacon Chain’s consensus layer at a Terminal Total Difficulty of 58,750,000,000,000,000,000,000, ending the use of a proof-of-work consensus system. With the Merge, the Ethereum network will have an energy efficiency of 99.95% and will be able to implement future scaling solutions, such as sharding.
In the tweet below, we can see that the Ethereum Merge has been completed.
And we finalized!
— vitalik.eth (@VitalikButerin) September 15, 2022
Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.
Approach
This dashboard allows us to analyze whether the Merge was a selling event? Taking into account the wallets into which miners have transferred Ethereum and also analysing user behavior on CEX before and after the Ethereum Merge as follows:
- Swapped Transactions And Volume By Miners On Ethereum
- Swap In And Swap Out Volume By Miners On Ethereum
- Percentage, Swap In And Swap Out Volume By Miners On Ethereum
- ETH Sold vs ETH Bought on DEX From Sep 1st to Sep 29th 2022
- Swap In And Swap Out Transactions By Miners
- Percentages , Swap In And Swap Out Transactions By Miners
- Transfers of ETH from wallets by miners
- ETH Balance trend across wallets
- ETH Balance trend across wallets which are having ‘2-8 ETH’
- ETH Balance trend across wallets which are having ‘9-16 ETH’ and ’17-36 ETH’
- Analyze the user behavior before and after the Ethereum Merge across CEX
- Take a look at how ETH transfers to CEX are slowing down after the merger
- As we move forward, we can look at how ETH transfers were made between the Top 10 central exchanges before and after the merger
- As a result of the merger, ETH sales are on the rise
Swapped Transactions And Volume By Miners On Ethereum
In this section, we can see the swapped transactions and volume by miners on Ethereum before and after the Merge since July 15th 2022. Between July 15, 2022 and September 29, 2022, there was a volume of 137.36M. In regard to the 2 Actions, Sold ETH contributes the most to the volume (76.62%). A maximum volume of 7.18M was observed on August 10, 2022, while a minimum volume of 423.43K was observed on September 25, 2022. The volume of Bought ETH and Sold ETH trended downward overall, with Bought TH falling the most at 86.38%. As a result, most Miners are selling their Ethereum instead of buying it after the merger. As a result, we can conclude that Merge became a selling agent.
If we look at the Belwo graph for the dates September 16th and 17th 2022, the amount of sold ETH has suddenly increased after the merge. The Sold ETH volume accounts for almost 90% of the Sale Volume these two days. It is evident that Ethereum is becoming a sale agent for miners instead of a purchase agent.
Below is a graph that shows the ETH swapped volume for both ETH sold and bought on DEX for the past 4 weeks. From the 2 Actions, the Action Sold ETH contributes the most (77.32%). Total Actions are divided by Bought ETH and Sold ETH, with Bought ETH being the lowest and Sold ETH being the highest. Both Sold ETH and Bought ETH trended downward, with Bought ETH falling the most at 40.62%.
From the graph below, we can see that there were 7.91M swapped transactions between July 15, 2022 and September 29, 2022. In terms of total Transactions, Action Sold ETH contributes the most (54.33%). The lowest total Transactions are 3.61M (bought ETH) and the highest are 4.3M (sold ETH). The maximum number of transactions was 134.91K on September 26, 2022. Transactions showed a downward trend in both bought and sold ETH, with sold ETH falling by more than 75%. The percentage of transactions for bought ETH is steady.
Transfers of ETH from wallets by miners
The following graph shows the comparison between the Ethereum transferred amount by miners and the ETH price since July 15 2022. We can see here that the amount of ETH that was being transferred decreased after the merge. After the merge, the price of ETH was also reduced. This was caused by the volatility of the crypto market.
From the below graph we can see how the ETH trend across wallets by their balance category since July 15th 2022. About 83.2% of total wallets were associated with 1 or more ETH Balance Categories. The total number of wallets decreased by 94% from 442.55K on July 15, 2022 to 25.03K on September 28, 2022. Wallets with category 2 to 8 ETH are trending downward the most, with a fall of 91%.
Across wallets with a ‘2-8 ETH’ category, we can clearly see that the ETH blance trend is declining drastically after the merger. For the past 4 weeks, there have been 151K ETH balance wallets in this category before the merge on September 4th 2022. After the merge, there are almost 3K ETH balance wallets in this ‘2-8 ETH’ category on Sept 28th 2022. We can conclude from this that most wallets are selling their ETH after the merger. As a result, we are able to conclude that Ethereum became a selling event after the merger.
We can see from the below graph the ETH balance trend for the nine to sixteen and seventeen to thirty-six ETH categories across wallets in these categories. Following the merge, we can see a decreasing trend for wallets on these categories. This is evident from the fact that most wallets are now selling their ETH.
Analyze the user behavior before and after the Ethereum Merge across CEX
As we can see here, ETH transfers to CEX have changed before and after the post-merge since Aug 1 2022. The previous day of the merge, a lot of ETH transfers to CEX were made. The following day, we can see the slowing of ETH transfers to CEX after the merge. There was a maximum amount of Ether Volume of 24.09M on September 14, 2022. In September 16, 2022, the total Eth Volume is lower than usual, and in September 14, 2022, it is higher than usual. We can see here that ETH transfers to CEX have slowed down after the merge. Perhaps they all sold their Ethereum after hearing of the merge. This also implies that the ethereum merge has become a selling event.
When we look at the ETH transfers to the top 10 centralized exchanges by users before and after the Ethereum Merge, we can see that about 10 CEXs increased transfers by users on Sept 14, 2022 (prior to the Merge). As a result of the merger, all 10 centralized exchanges have seen ETH transfers slowing down. A total of 221.13M Eth were traded between August 15, 2022 and September 29, 2022A maximum Ethereum volume of 18.18M was observed by all the top 10 CEXs on September 14, 2022. The total Eth volume in September 16 was lower than normal, and it was higher than normal in September 14, 2022. After the merger, 10 CEX’s Eth Volume trended downward.
According to the graph below, ETH sales have increased after the Merge. The maximum number of swaps with Eth Token In was 43.96K on September 23, 2022. There is an increasing trend in swaps with Eth Tokens.
Observations
- The volume of Bought ETH and Sold ETH declined overall, with Bought ETH falling the most at 86.38%. Therefore, most miners are selling their Ethereum rather than buying it after the merger. Merge was therefore transformed into a selling event as a result.
- Based on the above analysis for September 16th and 17th 2022, the amount of sold ETH has suddenly increased after the merger. ETH sales account for almost 90% of the sale volume these two days. It is evident that Ethereum is being used by miners as a sales event instead of a purchase event.
- As shown in the above analysis, the ETH balance trend for the 9-16 and 17-32 ETH categories decreased after the merger. As evident by the fact that the majority of wallets are now selling their ETH, this is true. Therefore, Ethereum Merge has become a selling event for most miners.
- As per the CEX ETH transfers on September 14 2022, many ETH were transferred to CEX on that day. ETH transfers to CEX have slowed down since the merger the next day (September 15,2022).
- CEX’s ETH transfers have slowed down since the merger, as we can see here. The news of the merger may have caused them all to sell their Ethereum. In this way, the Ethereum merge can also be considered a selling event for Ethereum.
- Moreover, we can see that the top 10 CEXs increased users’ transfers on Sep 14, 2022 (before the merger). Since the merger, all ten centralized exchanges have noticed a slowdown in ETH transfers.
- The sale of ETH has increased since the merger, according to analysis. As of September 15, 2022, there were 42.76K swaps with Eth Token In. There is an increase in swaps involving Eth Tokens.
- After the merge, we can say that a large amount of ETH has been sold because of the decreasing volume of ETH swapped by miners and the slowdown in ETH transfers to CEX. Therefore, we can conclude that the Ethereum merger is a selling event.
Reference Query
with eth_swapped_out as (
select
'Sold ETH' as action,
date_trunc(day, block_timestamp) as date,
count (distinct tx_hash) as txns,
sum (amount_in) as volume
from
ethereum.core.ez_dex_swaps
where
symbol_in ilike '%ETH'
and block_timestamp >= '{{start_date }}'
and amount_in <= 1e6
GROUP BY
date
),
eth_swapped_in as (
select
'Bought ETH' as Action,
date_trunc(day, block_timestamp) as date,
count (distinct tx_hash) as txns,
sum (amount_out) as volume
from
ethereum.core.ez_dex_swaps
where
symbol_out ilike '%ETH'
and block_timestamp >= '{{start_date }}'
and amount_out <= 1e6
GROUP BY date
)
SELECT * FROM eth_swapped_out
UNION
SELECT * FROM eth_swapped_in