Insight Report

The Impact of the Merge on Institutions

A review of where we are in Ethereum's protocol development and how the Merge to Proof of Stake impacts institutions.

September 2022

Ethereum is a technology platform that is being built for the long term. It is the foundation on which the future of the internet (Web3), and the future of finance (DeFi) is being built.

Over the last two years, the network saw skyrocketing figures for adoption and utilization—strong signals for network maturity. Today, more than half of the entire DeFi ecosystem exists on Ethereum. In September 2022, the Ethereum blockchain underwent the first major upgrade on its roadmap: The Merge.

The Merge reshapes the world’s largest programmable blockchain by switching from the energy-intensive Proof of Work (PoW) consensus mechanism to the Proof of Stake (PoS) mechanism, with no downtime to the Ethereum network and no impact to or action required from users or developers.

On September 5th, MetaMask Institutional and the ConsenSys Cryptoeconomic Research team launched an insight report examining the Impact of the Merge on Institutions. On September 12th, the authors discussed the report on a webinar.

The report walks through the following subjects:

Why Ethereum is ultrasound money
The key changes the Merge will deliver across Ethereum network activity, network security, and network valuation
The evolution of institutional engagement with Ethereum
Navigating institutional participation in DeFi and Web3
How the Merge will impact institutions
The future of Ethereum and Institutional DeFi

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Authors

Ajay Mittal

Senior DeFi Portfolio Strategist

Charles Shen

Senior DeFi and DAO Token Engineer

Clemens Wan

Senior Technical Architect

David Shuttleworth

DeFi Protocol Economist

Ivan Bakrac

Senior DeFi Market Strategist

James Chung

Senior DeFi Market Strategist, ConsenSys

Nicole Adarme

Head of Institutional Marketing, ConsenSys

Simran Jagdev

Content Marketing Manager, ConsenSys

Yanlin Fu

Product Marketing Manager

Disclaimer

ConsenSys Software Inc. is not a registered or licensed advisor or broker. This report is for general informational purposes only. It does not constitute or contain any individual investment advice and is made without any regard to the recipient’s objectives, financial situation, or means. It is not an offer to buy or sell, or a solicitation of any offer to buy, any token or other investment, nor is it intended to be used for marketing purposes to anyone in any jurisdiction. ConsenSys does not intend for any person or entity to rely on any facts, opinions, or ideas, and any financial or economic commentary expressed in this report may not be relied upon. ConsenSys makes no representations as to the accuracy, completeness, or timeliness of the information or opinions in this report and, along with its employees, does not assume any responsibility for any loss to any person or entity that may result from any act or omission based upon this report. This report is subject to correction, completion, and amendment without notice; however, ConsenSys has no obligation to do so.

MetaMask Institutional is the DeFi wallet and Web3 gateway for organizations.

MetaMask Institutional offers unrivaled access to the DeFi ecosystem with institution-required security, operational efficiency, and compliance. We enable cryptofunds, market makers, trading desks, and DAOs to trade, stake, borrow, lend, invest, bridge assets, and interact with over 17,000 DeFi protocols and applications.