What has changed in ETH from PoW to PoS with this upgrade?

The “Merge” in 2022, ( The Merge ), was the largest technical turning point in Ethereum's history. Transitioning from the mining model ( PoW ) to the staking model ( PoS ) appears to be merely an update to the consensus mechanism, but in reality, it changed the operational logic of the entire ecosystem.

Three Core Changes

Energy consumption directly decreased by 99% Previously, ETH relied on mining rigs consuming electricity to secure the network, but now it has shifted to staking ETH for participation. Users lock their coins into the contract to earn staking rewards. This directly addresses the anxiety over energy consumption, giving institutional investors fewer excuses about “mining pollution.”

Network throughput has room for imagination PoS paves the way for the subsequent Sharding technology (. Sharding is the process of dividing the blockchain into multiple parallel processes, theoretically allowing ETH's transaction speed to soar. It is still in the testing phase, but this direction is correct.

Security is even stronger Under PoS, the cost of attacking the network becomes an economic cost - you have to spend money to buy ETH to stake, and then you are punished for malicious behavior when discovered )slashing(. This mechanism is harder to break than simple computational power competition.

Why the DeFi Ecosystem Cannot Do Without ETH

In plain terms, ETH = the infrastructure of DeFi.

• Lending Protocol)Aave/Compound(: These platforms are built on ETH, allowing users to stake assets for lending, completely decentralized.
• DEX)Uniswap/Curve(: Peer-to-peer trading, no central risk, liquidity mining attracts users
• Stablecoin Ecosystem: USD-pegged tokens like USDT often run on the ERC-20 standard and require ETH for gas fees.

The TVL of DeFi ) is largely locked in the ETH ecosystem, indicating that the market still recognizes this platform.

The roles of ETH and USDT are different

ETH is a growth asset Price fluctuations mainly depend on:

• Macro factors ( Federal Reserve interest rates )
• Technical Progress ( Ethereum 2.0, danksharding and other upgrades )
• Ecological heat ( NFT explosion, DeFi innovation )

The market is generally bullish, with analysts believing that it could reach $10K by 2025 and even $15K+ by 2030. However, this is all based on assumptions, and the volatility risk is also significant.

USDT is a stabilizer Pegged to the US dollar, the price is basically $1. The purpose is:

• Risk hedging: When the market crashes, investors switch to USDT to avoid risks.
• Cross-border settlement: International remittances using USDT are much faster than traditional banks.
• Liquidity Reserve: The reserve used by the exchange to pair various cryptocurrencies.

How important is the ERC-20 standard?

This is the most successful innovation of ETH. ERC-20 is a set of coding standards that allows anyone to create new tokens on ETH without having to build a chain from scratch. The result is:

• Thousands of projects issue tokens based on ERC-20
• Explosive growth of ecological applications
• But it also brought about the proliferation of junk coins and scam coins.

Uncertainty of the Future

Challenges facing ETH:

• Layer 2 Competition: Layer 2 solutions such as Arbitrum, Optimism, and Polygon are diverting the ecosystem.
• Other public chain threats: Chains like Solana, Aptos are competing for territory
• Regulatory Risk: If policies strike, the first to be affected is Ethereum.
• Technical Risk: Will upgrades such as Danksharding and Proto-Danksharding be delivered on schedule?

However, from a fundamental perspective, the developer base, application density, and security of ETH currently have no rivals that can truly shake them.

Overall: The upgrade of ETH from PoW to PoS is not perfect, but the direction is correct. The next focus is whether sharding can truly accelerate the network, and whether DeFi innovations can continue to attract capital and users.