Citigroup Called The Benefits Of Switching Ethereum To PoS

The Merge update scheduled for September will reduce the energy intensity of the Ethereum network, transfer the asset’s emission to a deflationary model, and “pave the way for a more scalable future through sharding.” Citigroup analysts stated this, reports CoinDesk.

Experts recalled that the merger of the leading cryptocurrency network with Beacon Chain is one of the five stages of the planned Ethereum modernization. The Merge can increase blockchain throughput by 10% by reducing the block time from 13 to 12 seconds.

The update also lays the groundwork for the next upgrade, the Surge. The latter will allow Ethereum to process up to 100,000 transactions per second. The effect is planned to be achieved through the use of sharding technology.

According to analysts, the transition to the Proof-of-Stake (PoS) consensus algorithm will lead to a reduction in the volume of Ethereum emissions by 4.2% per year. Citigroup stressed that this would positively impact ETH’s perception as a value store.

The specialists explained that the transition to PoS will turn the cryptocurrency into a “profitable asset,” functioning in a network with abundant cash flows. This will allow the Ethereum ecosystem to become the base for most DeFi applications.

The bank also noted that ETH could be viewed as a relatively energy-efficient and environmentally friendly digital asset after the upgrade. Analysts expect grid electricity consumption to drop by 99.95%.

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