The merge changed Ethereum’s consensus mechanism from Proof of Work to Proof of Stake. This means that no mining (computation to solve algorithms) is required to generate new blocks in a transaction. Instead, new blocks are proposed by network validators. The participant is eligible to lock and choose an amount of tokens in the network (her ETH in this case).
NFTs are known to demand a significant amount of block space and transaction speed when creating collections, which proved to be a problem for Ethereum under PoW. In this post, we’ll see if PoS has improved our network’s metrics to better handle periods of high demand.
block time
Under PoW, block time (the time it takes a transaction to produce a block) is set by the hashrate the network needs to process transactions and the difficulty set by the algorithms used to validate them. It was a function of degrees. Therefore, this value was not constant and fluctuated between 12 and 15 seconds. This meant that the number of blocks on a daily basis fluctuated wildly (and consequently the number of transactions the network could handle).
With the introduction of PoS, these Terms have changedThe block time is now fixed at 12 seconds and has a different name (timeslot). Furthermore, these timeslots are grouped into epochs of 32 slots each. This stabilizes block production, as the graph below shows.
The merge took place on September 13th, and since then we can see that the number of daily blocks has increased and block times have remained virtually stable. Therefore, the supply of block space for transactions has increased.
However, the number of transactions within a block is not constant. Different types of transactions consume more or less block space. For example, complex smart contract exchanges require more space than token transfers between wallets. The graph below shows his daily transaction count on the Ethereum blockchain.
With a more stable lower bound (around 1.1 million transactions) and a higher number of blocks available, it shows a slight increase in daily transactions after the change to PoS.
gas fee
Another metric related to NFT transactions is gas prices. This is a portion of the amount a user spends to be able to submit a transaction. Its value directly correlates with the demand for space within the blocks of the network. The higher the demand, the higher the price.
When an NFT collection is creating an NFT, typically a large number of users will try to submit transactions in a short time (because of the limited number of items). In this situation, users have to pay more to broadcast their transactions as the block size is limited.
Ethereum’s current update did not change this scenario as it did not make any upgrades related to the network’s block size. The chart below highlights the gas price values before and after the merger.
There were no related changes in block space demand before and after The Merge. Gas prices remained the same. The upgrades that make a big difference in this scenario are: “The SurgeIntroduces network “sharding” that allows blocks to be processed in parallel, increasing the supply of block space on the network.
According to the Ethereum Upgrades Roadmap above, all future upgrades will focus on scalability and performance improvements to make Ethereum a high-throughput blockchain.
important point
The main change for The Merge is the introduction of the PoS consensus algorithm on one of the major public blockchains. This has brought stability to Ethereum’s block times while reducing the network’s energy consumption.
While The Merge did not result in dramatic changes to overall Ethereum blockchain metrics, it was a necessary step towards the increased transaction output provided by The Surge.
The NFT sector did not see a surge in the number of NFT transactions after The Merge on Sept. 13, as shown in the chart below, so we tested this new Ethereum setup to see how it could handle the increased demand load. It has not been verified whether to process.
However, the more block space available, the better the network performance theoretically compared to the previous state. You can see when the next super hot collection drop will happen.
Contributors to this work are footprint analysis community.
The Footprint Community is a place to help data and crypto enthusiasts around the world understand and gain insights about Web3, the Metaverse, DeFi, GameFi, or any other area of the emerging blockchain world. Here you’ll find vibrant and diverse voices who support each other and move the community forward.
September 2022, Thiago Freitas
