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😬 ‘Massive Dumping’ by Ethereum Miners Punishes ETH

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The Merge
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Market Action

😬 ‘Massive Dumping’ by Ethereum Miners Punishes ETH

Shift to Proof of Stake Roils ETH Market But Perhaps Only for the Short Term

By Samuel Haig    

DISMAY Ever since The Merge took place on Sept. 15 investors have looked on in dismay as Ether lost a fifth of its value over the next four days. What was going on? Many traders expected some profittaking and sell-the-news market action, but the historic upgrade was supposed to usher in a vibrant new era for Ethereum, not a spasm of bearish selling.

MINERS Now, one of the causes for the selloff may be emerging — Ethereum miners are dumping ETH at record levels, according to data from OKLink.


Crypto Regulation

🏛 Gensler Rattles DeFi With Suggestion PoS Coins are Securities

Crypto Supporters Decry Move to Treat Ethereum Same as Stocks and Bonds

By Aleksandar Gilbert

BATTLE The Merge may be complete, but the battle for legally defining Ethereum 2.0 is just beginning. Hours after Ethereum completed its historic transition to Proof of Stake technology, a top U.S. regulator said cryptocurrencies that use this approach should probably be defined as securities. 


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DeFi Domains

🕹 ENS Regains Control Of eth.link Domain

Manifold Finance Purchased The Domain For $850K Two Weeks Ago

By Owen Fernau  

CONTROL Ethereum Name Service (ENS) has regained control of the eth.link domain, according to the project’s Twitter account. Nick Johnson, the founder of ENS, describes eth.link as a decentralized application (dapp) built on top of ENS which allows the internet’s Domain Name System (DNS) to access information stored in ENS.


Blockchain Interoperability

Cosmos’ ATOM Bucks Broader Bearish Trend

Ecosystem Of Blockchains Unveils Interchain Security

By:Owen Fernau  

ON THE RISE Even as the price of Ether has sunk this week despite a successful Merge, another blockchain ecosystem is on the rise. 



👀 Ether Not Quite ‘Ultrasound’ Money As Inflation Persists

ETH Issuance Has Dropped By 97%

By Owen Fernau

MONEY Proponents hoping to immediately proclaim Ether to be an “ultra sound” form of money can’t celebrate just yet.



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DeFi Explainers

🧐 What Is Synthetix?

A Step-by-Step Primer on the DeFi Derivatives Platform

By Rahul Nambiampurath

RISKY MARKET Synthetix operates in one of the riskiest markets in finance — crypto derivatives. These are financial instruments that even professionals find difficult to manage and may punish ill-prepared retail investors. In some nations such as the U.K., regulators have prohibited the sale of crypto derivatives to retail investors. 



🔗 What kind of layer 3s make sense?: Vitalik Buterin

One topic that often re-emerges in layer-2 scaling discussions is the concept of “layer 3s”.

🔗 Ethereum Fork ETHPoW Suffers Bridge Replay Exploit, Token Tanks 37%: Decrypt

ETHPoW, the proof-of-work blockchain forked from Ethereum that went live shortly after Ethereum’s transition to proof-of-stake (PoS) last week, has fallen victim to a replay exploit that resulted in an extra 200 ETHW tokens being siphoned by the attacker.

Trending in The Defiant
  • ETH Plummets Post-Merge as DeFi Chugs Along Maybe the Merge was a sell-the-news event after all. ETH has fallen just under 10% in the past 24 hours, while Bitcoin, the world’s largest cryptocurrency, has only dropped 2%. The DeFi Pulse Index (DPI), the largest index focused on DeFi, is down 6%.

🧑‍💻 ✍️ Stories in The Defiant are written by Owen Fernau, Aleksandar Gilbert, Samuel Haig, and yyctrader, and edited by Edward Robinson, yyctrader and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.

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Proof of Work Mining Craters After Ethereum’s Merge

Ethereum Miners Struggle to Find Their Footing After The Merge

By Samuel Haig

FALLOUT The fallout from The Merge for Proof of Work mining outfits has been swift and profound. As expected, many former Ethereum miners appear to be shutting down their hardware following the execution of its historic upgrade last Thursday. 

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The Merge switched Ethereum to Proof of Stake consensus, dropping miners from the network and reducing its energy consumption by 99.8%. According to Justin Drake of the Ethereum Foundation, the network was estimated to consume between 0.1% and 0.3% of global electricity before The Merge, with the network now using “almost 0%.”

The upgrade paves the way for greater institutional adoption, mitigating concerns from enterprises that they may compromise their ESG goals by using the network. It also reduced new Ether issuance by 87.5%, alleviating the enormous selling pressure previously coming from miners.

Hashing Power

Less than one-third of Ethereum’s hashing power has migrated to Proof of Work chains after The Merge. An estimated $5B worth of mining hardware was displaced by the shift, forcing miners to seek out opportunities on other Proof of Work chains. 

But with the flood of hash rate from Ethereum annihilating the rewards available to miners on PoW chains, many are choosing to exit the market rather than pay more for electricity than they would receive in mining rewards.

Mining Hardware

ETHPoW, a fork of Ethereum launched by large miners hours after the Sep. 15 merge, promised to provide a haven for displaced mining outfits. So too did smaller networks such as Ethereum Classic, Ergo, and Ravencoin that support Ethereum’s EtHash mining hardware. 

But the majority of Ethereum’s nearly 900 terahashes per second (TH/s) in former hashing power has been turned off, according to data from 2miners.

Ethereum Classic was the largest beneficiary of The Merge among rival Proof of Work chains, with its hash rate quadrupling over the past week and growing 900% in two months. 


Ethereum Classic’s hash rate surged to a record high of 307 TH/s on Sept. 15, the day of The Merge. But its hash rate fell by 105 TH/s since then as the profitability of mining ETC plummeted, meaning just 16% of Ethereum’s hashing power joined the network.

ETC hash rate over seven days. Source: 2miners.

Wpwrak, an Ethereum Classic miner, told The Defiant that while some of Ethereum’s displaced hash rate would migrate to Ethereum Classic, a significant share of the hashing power “will vanish because it has nowhere to go and still be profitable.”

“It may take a while before owners of such doomed hash rates understand their situation,” they added.


The hash rate of ETHPoW has crashed by more than 60% since Sept. 16, falling to 30.7 TH/s in hashing power. The figure accounts for 3.5% of Ethereum’s hash rate.

Ergo enjoyed explosive hash rate growth following The Merge, with more than 200 TH/s joining the network during Sep. 14 and Sep. 15. But its hash rate also crashed over the weekend to currently sit at 86.7 TH/s, suggesting only 5.5% of Ethereum’s orphaned miners have been retained by Ergo.

Mining Power

Ravencoin was also among the few networks to experience a multi-terahash influx of mining power amid The Merge. Its hash rate surged 650% to 20 TH/s since the start of the month, and unlike its rivals, the figure has held steady since Sept. 5. Still, the network’s growth represents just 2% of Ethereum’s former hash rate.

Ravencoin hash rate over one month. Source: 2miners.

“RVN has a smooth difficulty adjustment, so it did handle the influx just fine,” Tron Black, Ravencoin’s lead developer, told The Defiant. “We welcome new ETH miners, it adds security.” 

Speculation that investors may look to exit positions after the execution of The Merge is playing out, with the markets pulling back significantly in recent days.

Local Top

The price of ETH began sinking on Sept. 13, with the markets posting a local top of $1,770 the day before. The market is down 27% in one week, with the asset last trading hands for $1,293, according to CoinGecko.

Proof of Work coins are also falling. ETHPoW’s ETHW coin dropped more than 90%. While future ‘IOU’ contracts for ETHW rallied more than 70% on the day of The Merge, the coin last changed hands for just $4.81 after peaking at $51. 

With the price down in the doldrums, ETHW is issuing just $65,000 in mining rewards daily, a far cry from the $20M worth of ETH collected by Ethereum miners when the network was Proof of Work.

ETHW/USD. Source: CoinGecko.

The price of ETC rallied to $41.5 on Sep. 7 after changing hands for just $14 in mid-July. But ETC traders are steadily offloading their coins, with ETC dropping 31.5% to its lowest level since July.

Ergo’s ERG coin rallied 225% from mid-July until Sept. 15. But ERG’s price has since crumbled by 41%.

And Ravencoin is similarly down 43% since The Merge.



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