Swaps

• The average and daily number of swaps have stayed relatively similar both before and after the merge;
• On the contrary, the number of swappers considerably increased during the merge, and although it has decreased since then, it has stayed higher than the values before the merge;
• The swaps volume both from and to all of the tokens in the Ethereum ecosystem had massively decreased around the merge compared to the last 3 months;
• While the average and daily number of tokens swapped from has remained similar both before and after the merge, the average and daily number of tokens swapped to have increased after the merge;
• Overall the diversity of tokens that are swapped to has increased in the past few months.

Introduction

Ethereum switched from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism On September 15th. It was one of the most anticipated events in the whole cryptocurrency industry. While this transition aimed to provide infrastructure for future updates in Ethereum’s roadmap without an obvious effect on the everyday actions conducted by users, a majority of them adjusted their activities based on this event.

In this analysis, the user behavior in various segments of the Ethereum ecosystem has been evaluated to provide a general idea of how these users have reacted to The Merge.

Methodology

The required data for this analysis were selected from various tables of the Core schema of the Ethereum database, such as fact_transactions, ez_dex_swaps, ez_token_transfers, and ez_nft_sales. The user behavior was measured using multiple metrics, including the number of transactions, the volume of transactions, and the number of participants in each segment. Some other specific factors were also measured for each of the segments.

Conclusion

In conclusion, the analysis of user behavior before, during, and after the merge from various perspectives has demonstrated that in the more inclusive areas, such as transactions, swaps, and stablecoins transfers, the activity on the day of the merge massively increased. While in the majority of the measured metrics, the values decreased post-merge, they generally preserved higher levels compared to the values before the merge, except for the fees. Although the average gas used slightly increased to a relatively constant level after the merge, the significant decrease in the average gas price has resulted in a considerable drop in the transaction fees. The swaps and stablecoins transfers followed the same fluctuations same as the overall aforementioned trend. On the NFT side, the analysis has demonstrated that the merge has had little to no effect on the sales activity of these assets and they followed the overall crypto market movements. By doing so, the NFT sales on Ethereum have kept decreasing over the past few months. Last but not least, while the impacts of the Merge have yet to be observed, it could be concluded that this event has had a positive impact since it went live.

NFTs

• The number of NFT sales had a downward trend throughout the 3 months before the merge. After that, it increased to higher levels;
• On the other hand, the sales volume has continuously decreased and nearly halved compared to 3 months ago;
• The trend of both the number of buyers and sellers has been similar to the trend of sales and after a continuous decrease, they have slightly increased post-merge;
• The number of traded NFTs has also had a slight downtrend throughout the measured period;
• The number of traded NFT collections though has increased to a stable level after the merge. It is almost 10% higher than the levels before the merge;
• The increase in the number of sales and the decrease in the sales volume resulted in a considerable drop in the average price of NFTs. This drop has been nearly 50% compared to the NFT prices pre-merge;
• The drops in the prices of all NFTs across the whole Ethereum ecosystem have also resulted in the overall decrease of fees generated from the sales of NFTs;
• At the same time, these decreases resulted in both the marketplaces and the NFT creators earning less money over the past 3 months.
• In general, the analysis of NFT sales has indicated that the merge has had little to no impact on this segment of the Ethereum ecosystem, and the decreases are majorly affected by the whole crypto bear market and recent crashes in the price of risk-on assets, such as NFTs.

The time frequency of this analysis was divided into the following categories:

• The Merge itself happened on 15th of the September, and although it was around 6 a.m., the whole day was labeled as The Merge day;
• The Post Merge was considered the days from Sep 15 until the day before the current day to remove incomplete data;
• For the Pre Merge label, an equal number of days since The Merge (Post Merge) were counted backward to have the same window for the measurements of the averages and the daily metrics;
• As a supplementary window, the last 3 months before Sep 15 were also considered to have a wider time-scale for the measured metrics, and to be able to have a better comparison between the data.

For the analysis of stablecoins transfers, four tokens of USDT, USDC, BUSD, and DAI were selected as the top stablecoins in the Ethereum ecosystem.

Transactions

• The number of transactions per second had a downward trend before the merge, while on that day it increased by a considerable amount. After the merge though, the TPS has decreased to the levels before the merge;
• The number of active users was also higher on Sep 15. While it has been higher post-merge compared to before the merge, it has stayed relatively the same as those levels;
• The ETH volume of transactions that involved a transfer of ETH tokens had increased before the merge and on average, doubled on the Merge day, which indicates a high level of volatility. However, it decreased to the levels of before the merge, afterward;
• Interestingly, the average transaction fees have drastically decreased since the merge. Considering the slight increase in the average amount of gas used, this decrease has been the result of lower gas prices after the merge. The average gas price has nearly halved compared to the pre-merge averages.

Analysis

By calculating the volume of swaps in U.S. dollar during the mentioned period, multiple cases of inaccuracies in the decimals of amount_in_usd and amount_out_usd columns were observed, which made the calculation impossible. The charts are present in this analysis, however, due to data being unreliable, no insights were provided in the swaps analysis section. The matter was reported via an open ticket to the data team for further investigation.

Stablecoins

• Although the number of stablecoins transfers saw an increase on the merge day, it has decreased to its prior levels after the merge;
• Volume-wise, the transferred volume more than doubled during the day of the merge;
• While on average the volume decreased to levels near the volumes before the merge, overall it has had an upward trend;
• Both the number of senders and receivers of stablecoins increased on Sep 15 compared to before and after the merge;
• While the number of senders has relatively remained in a similar range, the number of receivers had increased for the previous 3 months up to the merge. It then decreased to levels below the pre-merge numbers.