What is the Merge?

The Merge is a transformation in the way Ethereum processes transactions and how new ETH tokens are created.

It is about the combination of the Ethereum blockchain with a new separate blockchain. The new system, known as proof-of-stake, reduces the energy consumption of the Ethereum blockchain by 99.9%.

Moreover, the Ethereum Foundation, a prominent non-profit organization that says it supports Ethereum, mentioned that the upgrade will pave the way for more blockchain upgrades that will facilitate cheaper transactions in the future.

Overview

This dashboard analyzes the impact that the Ethereum merge had on the Optimism blockchain (an Ethereum L2 chain). Two scenarios are looked into deep analysis: 15 days before the Merge (September 1st to 15th), and from the Merge to the next 15 days (September 15th to October 1st). More precisely, for multiple metrics there is a comparison based on the daily tendency and the total amount comprised within the aforementioned timeframe. This is done for the 4 different aspects of Optimism:

• NFT Space
• Transaction Level Data
• Swap Activity
• Miners and Block Analysis

Key Findings

• NFT Space

  • The number of NFT sales increased by almost 3 times after the Merge. The number of collections sold also increased, as well as the number of sellers (which is also 3 times higher after the Merge). Despite this, the number of NFTs sold/seller has decreased on the daily basis. The trade volume on NFTs is also higher (30.9k vs 85.1k USD). Moreover, the average sale price of an NFT increased a 20% after the Merge.

• Transaction Level Data

  • The number of transactions/day on Optimisim after the Merge increased by a 70%, with the first transaction peak happening on the Merge day (September 15th). Despite the number of transactions being much higher after the Merge, the highest average ETH transactions/day were actually higher before the Merge. That means that the whales did most of their movements before the Merge to mitigate possible failure risks. The total amount of transaction fees have been higher after the Merge (12.12 ETH/day compared to 14.83 ETH/day respectively). However, this is because of the increase of transactions, as the average fees per transaction/day have decreased significantly.

• Swap Activity

  • The daily number of swaps and swappers increased slightly on Velodrome and multiplied by 2 and 3 (respectively) on Uniswap after the Merge. On the other hand, Sushiswap was affected negatively on this metric after the Merge. Velodrome and Uniswap increased slightly in trade volume, while Sushiswap decreased around a 50% after the Merge.

• Miners and Block Analysis

  • The average Gwei used per block decreased drastically after the Merge (1.06M compared to 737.87k Gwei). Moreover, the number of blocks created on Optimism increased massively (around a 70%) after the Merge. The reason behind this is that number of miners (on Ethereum) grew by 10 times, as the Proof-of-Work (PoW) miners were substituted by the Proof-of-Stake (PoS) validators that staked their ETH to help secure the network. As there was no need for a big investement in physical equipment to create new blocks anymore, it was more achievable for users to become validators.

NFT Space

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• The number of NFT sales increased by almost 3 times after the Merge. However, this number was not very high right after the Merge, but it pumped five days after.

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• The number of collections sold also increased, as well as the number of sellers (which is also 3 times higher after the Merge). Despite this, the number of NFTs sold/seller has decreased on the daily basis.

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• The trade volume on NFTs is also higher (30.9k vs 85.1k USD).

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• The average sale price of an NFT increased a 20% after the Merge.

Transaction Level Data

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• The number of transactions/day on Optimisim after the Merge increased by a 70%, with the first transaction peak happening on the Merge day (September 15th).

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• Four days after the Merge was the day with the most ETH transacted (with 86.4k ETH). That was partly because a whale (= a user with large amount of funds) transacted 35.56k ETH in a single transaction.

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• Despite the number of transactions being much higher after the Merge, the highest average ETH transactions/day were actually higher before the Merge. That means that the whales did most of their movements before the Merge to mitigate possible failure risks.

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• The total amount of transaction fees have been higher after the Merge (12.12 ETH/day compared to 14.83 ETH/day respectively). However, this is because of the increase of transactions, as the average fees per transaction/day have decreased significantly.

Swap Activity

The exchanges used to obtain these metrics are the two leading Optimism exchanges by TVL (Uniswap and Velodrome), as well as Sushiswap.

Miners and Block Analysis

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• The daily number of swaps increased slightly on Velodrome and multiplied by 2 on Uniswap after the Merge. On the other hand, Sushiswap was affected negatively on this metric after the Merge.

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• The same scenario happened for the number of swappers, with the exception that Uniswap’s swappers increased by 3 times instead.

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• Finally, Velodrome and Uniswap increased slightly in trade volume, while Sushiswap decreased around a 50% after the Merge.

• The average Gwei used per block decreased drastically after the Merge (1.06M compared to 737.87k Gwei).

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• The number of blocks created on Optimism increased massively (around a 70%) after the Merge.

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• The number of miners grew by 10 times, as the Proof-of-Work (PoW) miners were substituted by the Proof-of-Stake (PoS) validators that staked their ETH to help secure the network. As there was no need for a big investement in physical equipment to create new blocks anymore, it was more achievable for users to become validators.

Methodology

• The data used in this analysis was collected by combining the information on the fact_transactions, fact_blocks, ez_nft_sales, fact_event_logs, fact_token_transfers, fact_hourly_token_prices, sushi.ez_swaps and velodrome.ez_swaps tables of the core schema of the Optimism database.

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• The first three tables were used for the three following scenarios analyzed in this dashboard: NFT Space, Transaction Level Data and Miners and Block Analysis.

• The remaining tables were used for the Swap Activity scenario.

The last phase of updating the Ethereum network before the Merge occured between September 13 and 15. That stage consisted of the “Bellatrix phase”, which launched the merger process, with the update of the node operators. This date was filtered in the queries.

Conclusions

• NFT Space

  • The number of NFT sales increased by almost 3 times after the Merge. The number of collections sold also increased, as well as the number of sellers (which is also 3 times higher after the Merge). Despite this, the number of NFTs sold/seller has decreased on the daily basis. The trade volume on NFTs is also higher (30.9k vs 85.1k USD). Moreover, the average sale price of an NFT increased a 20% after the Merge.

• Transaction Level Data

  • The number of transactions/day on Optimisim after the Merge increased by a 70%, with the first transaction peak happening on the Merge day (September 15th). Despite the number of transactions being much higher after the Merge, the highest average ETH transactions/day were actually higher before the Merge. That means that the whales did most of their movements before the Merge to mitigate possible failure risks. The total amount of transaction fees have been higher after the Merge (12.12 ETH/day compared to 14.83 ETH/day respectively). However, this is because of the increase of transactions, as the average fees per transaction/day have decreased significantly.

• Swap Activity

  • The daily number of swaps and swappers increased slightly on Velodrome and multiplied by 2 and 3 (respectively) on Uniswap after the Merge. On the other hand, Sushiswap was affected negatively on this metric after the Merge. Velodrome and Uniswap increased slightly in trade volume, while Sushiswap decreased around a 50% after the Merge.

• Miners and Block Analysis

  • The average Gwei used per block decreased drastically after the Merge (1.06M compared to 737.87k Gwei). Moreover, the number of blocks created on Optimism increased massively (around a 70%) after the Merge. The reason behind this is that number of miners (on Ethereum) grew by 10 times, as the Proof-of-Work (PoW) miners were substituted by the Proof-of-Stake (PoS) validators that staked their ETH to help secure the network. As there was no need for a big investement in physical equipment to create new blocks anymore, it was more achievable for users to become validators.

As there are no miners on Optimism, this metric was analyzed using those from its L1 chain: Ethereum.