On the Merge
Quick Takes The Merge significantly changes Ethereum’s monetary policy with a ~90% reduction in ETH issuance. For 6–12 months, validators’ principal (32 ETH) and new issuance will also be illiquid and stuck on the Beacon Chain. Circulating ETH supply may significantly contract through deflationary monetary policy and increased demand for staking ETH. Commentary from the Ethereum community suggests a soft target for the Merge in September. A range of market measures suggests that the market is expecting the Merge to at least happen by year-end. Pricing on Binance rates suggests that the market expects the Merge to occur by end of September.