The Ethereum network successfully completed its transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), marking the realization of a long-held vision for its development team. Despite the monumental shift, the event unfolded with remarkable smoothness. The two major fork coins, ETC and ETHPOW, generated minimal market impact, with their combined market capitalization remaining below 4% of Ethereum's total value. Meanwhile, the U.S. SEC reiterated its concerns about PoS-based assets potentially being classified as securities, highlighting that real-world political challenges may pose greater hurdles for the crypto space than technical ones. Below is a detailed timeline of key events during the first 24 hours post-merge.
Key Events Unfolding Hour by Hour
The Final PoW Block and First PoS Block
At 14:43 on September 15, the NFT project @VanityBlocks minted "The Last POW Block" NFT on Ethereum's final PoW block. The transaction included a quote from American ethnobotanist and mystic Terence McKenna: "Nature loves courage. You make the commitment and nature will respond to that commitment by removing impossible obstacles. Dream the impossible dream and the world will not grind you under, it will lift you up. This is the trick. This is what all these teachers and philosophers who really counted, who really touched the alchemical gold, this is what they understood."
Immediately following the merge, the first PoS block was produced on the Ethereum network at block height 15,537,394. The validator for this inaugural block was address 0xeee27662c2b8eba3cd936a23f039f3189633e4c8. HashKey Capital embedded a memo in this block stating: "Supporting the next generation of blockchain innovation." During this period, Ethereum network gas fees surged temporarily, reaching 108 gwei.
Statements from Vitalik Buterin
Fifteen minutes before the merge, Ethereum co-founder Vitalik Buterin noted that the transition would reduce global electricity consumption by 0.2%. Following the successful completion, he expressed that this was a pivotal moment for the Ethereum ecosystem, adding that everyone who contributed to the merge should feel a profound sense of pride.
Shifts in Mining Hashrate
By 15:00, the ETC network's hashrate had soared to 92.48 TH/s, representing a 24-hour increase of 55.17%. Similarly, RVN's hashrate jumped to 10.092 TH/s, up 35.463%, and CFX's hashrate reached 1.6158 TH/s, a 55.74% rise within the same period.
Adjustments in Trading and Lending
By 15:30, the funding rate for ETHUSDT perpetual contracts on Binance had decreased from nearly -0.5% pre-merge to approximately -0.24%, indicating a reduction in short positions or hedging activities. Concurrently, borrowed ETH on Aave began to be repaid post-merge, driving the utilization rate down to below 75%.
Resumption of Services on Major Exchanges
By 16:00, leading exchanges such as Binance and FTX had reinstated deposit and withdrawal services for Ethereum mainnet tokens. All major DeFi and NFT protocols continued to operate without disruption.
Emergence of EthereumFair (ETF)
At 21:00, Poloniex, under Justin Sun's ownership, announced its support for EthereumFair (ETF) as the primary chain for ETHW tokens, citing community consensus and greater PoW hashrate backing. Notably, ETF is distinct from the ETHPOW fork promoted by figures like Bao Er Ye and was introduced by the ClassZZ technical community. BitCoke revealed that all its mining equipment would switch to the ETF chain, with plans to list ETF spot trading pairs after system maintenance concluded at 17:00 on September 16.
Mining Migration Insights
At 21:40, Ethan Vera, Chief Operating Officer of Luxor mining pool, shared that as hash difficulty increased on networks like ETC and RVN, intensified competition among miners was driving down potential returns. He estimated that 20-30% of Ethereum miners had already migrated to other networks, while the remainder had temporarily shut down operations.
Listing of ETHW and Mining Support
Exchanges including FTX and Bybit began listing EthereumPoW (ETHW). At 22:06, the ETHW team announced the launch of their mainnet, providing essential details such as RPC URL and Chain ID. F2Pool confirmed the launch of an ETHW mining pool, transferring existing ETH mining hashrate to support the new chain. ETHW utilizes the Ethash mining algorithm, compatible with both GPU and Ethash ASIC miners.
Market Price Movements
By 23:05, ETH had dropped below $1,500, while ETHW traded at $16.94.
Subsequent Hashrate and Price Data
By 08:00 on September 16, ETC's hashrate stood at 270 TH/s, down from a peak of 300 TH/s, with a price of $35.93. ETHW's hashrate was 59.87 TH/s, priced at $13.20, and ETF's hashrate reached 35 TH/s, valued at $17.33. The combined hashrate of these forks approximated one-third of Ethereum's pre-merge level, with a total market capitalization around 4% of ETH's.
Regulatory Concerns from the SEC
According to The Wall Street Journal, SEC Chair Gary Gensler indicated that Ethereum's shift to PoS might bring it under securities laws. He suggested that cryptocurrencies allowing staking could be subject to the Howey Test to determine their status as securities. Furthermore, he drew parallels between staking services offered by intermediaries like exchanges and lending activities, noting that the fundamental economic substance might be similar despite different labeling.
Post-Merge Stakeholder Concentration
By 09:00, the distribution of Ethereum staking nodes showed Lido dominating with 30%, followed by Coinbase at 14%, Kraken at 8.3%, and Binance at 6.5%. In contrast, during the PoW era, Ethermine pool held 28.9%, F2pool 14.5%, and Hiveon Pool 10%. While centralization levels appeared similar, the concentration shifted towards U.S.-based exchanges post-merge.
Frequently Asked Questions
What was the immediate impact of Ethereum's merge on energy consumption?
Vitalik Buterin highlighted that the transition to PoS reduced global electricity usage by an estimated 0.2%. This significant drop is due to PoS eliminating the energy-intensive mining process required in PoW.
How did major exchanges respond to the merge?
Platforms like Binance and FTX temporarily paused Ethereum mainnet deposits and withdrawals as a precaution. They resumed services within hours after confirming network stability, ensuring seamless user experiences.
What are the key differences between ETHW and ETF?
ETHW is one fork aiming to continue PoW mining, while ETF (EthereumFair) is another community-driven initiative with distinct technical backing. Exchanges and mining pools have chosen sides based on hashrate support and community consensus.
Why did the SEC express concerns about PoS cryptocurrencies?
The SEC's stance revolves around the Howey Test, which determines if an asset is a security. Staking mechanisms might resemble investment contracts, potentially placing them under regulatory scrutiny similar to traditional securities.
How did mining hashrate redistribute after the merge?
A significant portion of miners migrated to networks like ETC, RVN, and CFX, causing hashrate spikes. However, increased competition lowered profitability, leading some miners to shut down operations temporarily.
What does the future hold for forked Ethereum chains?
Given their relatively low hashrate and market capitalization compared to Ethereum, these forks face challenges in sustaining long-term value and network security. Their success hinges on community adoption and developer support.
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