Three years after The Merge: Ethereum lessons from Proof-of-Stake shift

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Three years after The Merge

The moment that changed Ethereum

On September 15, 2022, Ethereum completed The Merge — the largest upgrade in its history. The network abandoned the energy-intensive Proof-of-Work (PoW) algorithm and switched to the “eco-friendly” Proof-of-Stake (PoS). This shift became one of the most discussed events not only in the crypto industry but also in the global tech agenda.

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The transition reduced the network’s energy consumption by 99.95%, making Ethereum environmentally sustainable and comparable in power use to a single Web2 data center.

Proof-of-Stake and the staking phenomenon

The main outcome of The Merge was the introduction of staking. Mining became a thing of the past, replaced by validators who lock up ETH to confirm transactions.

Today, Ethereum has more than 1 million active validators. The total amount of staked ETH exceeds 36 million ETH ($162 billion)— nearly one-third of the total supply.

Analysts note that such capital concentration increases network security and reduces the risk of a 51% attack. According to Ethereum researcher Justin Drake, a successful attack would require control of 50% of all staked ETH plus 1 token — a task feasible only for a state-level actor.

“A 51% attack on Ethereum is harder than on Bitcoin,” Drake said.

The fate of Ethereum PoW: a “dead fork”

The switch to PoS sidelined miners, who launched an alternative chain — EthereumPoW (ETHW). The fork began with hype, but quickly lost both community interest and market capitalization.

Since launch, ETHW has lost almost 100% of its value. In 2022, hackers exploited the Omni bridge and stole 200 ETHW.

By 2023, most of the community was calling the project a “dead fork.”

As a result, Ethereum firmly established itself as a PoS network, while the PoW version faded into obscurity.

Price and market cap: Ethereum as an asset

Since The Merge, Ethereum has risen by 176% — from $1.600 to $4.500. Market capitalization grew from $180 billion to $536 billion.

In August 2025, ETH hit a new all-time high above $4.900.

Analysts attribute Ethereum’s growth not only to PoS, but also to subsequent upgrades that improved scalability and user experience.

Shapella, Dencun, Pectra: steps of evolution

Ethereum’s development did not stop with The Merge. The network has undergone several major upgrades, each marking a turning point.

Shapella (April 2023) — enabled withdrawals of staked ETH. Before this, many were concerned about “eternal lockup,” as funds were inaccessible. The upgrade boosted trust in staking, increased the number of validators, and made PoS more sustainable. It also improved transaction processing and client performance, making the network more stable.

Dencun (March 2024) — introduced EIP-4844 and data “blobs.” This reduced Layer-2 transaction fees by about 90%, giving rollups like Arbitrum, Optimism, and zkSync new momentum. Dencun effectively ushered in the era of “cheap data,” enabling broader DeFi, NFT, and gaming adoption.

Pectra (May 2025) — the largest post-Merge upgrade, with 11 EIPs. The key feature was account abstraction, enabling smart contract wallets with multisig, social recovery, and automated transactions. Pectra also improved validator security and streamlined user interaction. Experts call it a step toward mass Ethereum adoption, lowering entry barriers for newcomers and businesses alike.

Looking ahead: Fusaka and the post-quantum era

The next hard fork, Fusaka, is expected in November 2025. It will activate another 11 EIPs focused on scalability and resilience. Experts predict it will be crucial in preparing Ethereum for the post-quantum era, where classical cryptography may be vulnerable to quantum computing.

Meanwhile, Ethereum Foundation co-executive director Tomasz Stanczak urged developers not to overlook Fusaka, warning that shifting focus too early to the later Glamsterdam upgrade could slow near-term progress.

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What it means for users and investors

For everyday users, Ethereum’s upgrades bring:

- lower fees,

- improved wallet usability,

- stronger network security.

For institutional investors, Ethereum is becoming a more reliable long-term asset and the infrastructure backbone of Web3.

However, experts caution that PoS and upgrades do not eliminate all risks. The concentration of ETH among large staking providers like Lido and Coinbase raises centralization concerns, while the quantum threat remains a long-term challenge.

At the same time, Anthony Sassano, host of The Daily Gwei, noted that Lido’s ETH is distributed across dozens of independent node operators.

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Ethereum as a “living network”

Three years after The Merge, Ethereum has proven to be more than a cryptocurrency — it is an ecosystem that adapts and evolves:

- The network is greener and more secure.

- Validators provide resilience and decentralization.

- Developers continue to add features that strengthen Ethereum as the core of Web3.

Ahead lie Fusaka, post-quantum challenges, and likely new all-time highs. Ethereum entered the post-Merge era three years ago — but its journey is far from over.

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