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Dialogue with the founder of EthHub: What impact does the merger have on the future development of the Ethereum ecosystem?

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Miners will partner to continue operating the PoW chain in merged blocks, the biggest challenge for Ethereum is the execution of the existing roadmap

Original title: "AMA about the upcoming Merge and all-things Ethereum"

Original author: Nansen Alpha

Original compilation: Shenchao TechFlow

On the AMA about the upcoming Ethereum merger, EthHub co-founder Sassal gave his opinion on it, the following Here are the key questions asked during the AMA:

1. Will the miners surrender without a fight? Can you walk us through what happened behind the merger? What do you think the miners might do after the merger?

Miners will continue to operate the PoW chain in partnership in merged blocks. At least there will be a PoW fork, because it's an easy way to make money from the merge. However, without any form of support from Stablecoins, the DeFi ecosystem, and oracles, the entire chain would basically break. The hard fork uses TTD (Total Terminal Difficulty) instead of just a block number to prevent miners from playing the hash power game.

2. Assuming the merger goes well and the fork disappears, what do you think is the next challenge for Ethereum?

The most obvious challenge right now is how strong censorship is, as we saw last week with Tornado Cash. The biggest challenge for Ethereum is the execution of the existing roadmap. There's a lot of stuff on the roadmap, some already in development, some in research, but it's definitely not a simple roadmap.

Another big challenge is making sure people understand the value proposition of Ethereum L1 vs L2, which is more from a social and marketing side. In the future, L2 is where the activity will happen, and this is where the Rollup-centric roadmap is focused.

3. Which Rollup project are you most interested in and why?

As far as the ecosystem goes, it's clear that Optimism and Arbitrum are the clear leaders. Arbitrum and Optimism are similar in terms of EVM compatibility/equivalence, but differ in their approach and codebase/philosophy.

However, it is difficult to say who is better in terms of technology. There is still a lot of debate about which is better between Optimistic Rollups or ZK-Rollups and other ZK solutions. Generally speaking, the most interesting projects are those that can build a sustainable ecosystem without extreme token incentives, or any incentives at all. Although, having Token is not necessarily a bad thing, but there should be a clear development roadmap for value accumulation and sustainable growth.

4. What do you think of the monopoly of pledged derivatives in the ETH PoS system? How do you think this will affect the wider ecosystem?

We have seen the dominance of Lido, it went up to 33-34% at one stage, but then dropped back to 31%. Lido itself is not a single entity, it currently distributes staking among approximately 29 staking providers, and will become more over time. Of course, there is the problem of centralization. Some solutions to this problem:

· Build more decentralized staking providers like Rocket Pool;

· Staking with other providers to dilute stETH share dominance, as withdrawals are not yet enabled;

· On a social level, pressure on these entities continues;

5. As the scale of Ethereum expands, what do you think of the asset Ethereum?

If Rollups becomes a significant user of L1 (as expected), then L1 will need a lot of activity to accumulate revenue. Therefore, even if the overall activity of Ethereum increases sharply, while the income may decrease.

The value accumulation of ETH is mainly as a store of value/currency. A store of value is when the value/purchasing power of an asset does not depreciate against fiat currency over time. And currency, the currency premium comes from people wanting to hold ETH.

If all activity moves to L2, as we expect, it will not adversely affect ETH as an asset. While the absolute numbers may be down, overall this would be a positive for an asset like ETH.

ETH derives its value from its store of value/currency properties, while Much of the value in it comes from its utility (activity on the chain). L2 allows users to do more on-chain, and there is a strong feedback loop where value accumulates back into L1.