Let's discuss Ethereum's transition in detail today. If you like or want to read slowly, you can first like/share or bookmark.

The transition of Ethereum is actually quite obvious:

First, the Ethereum Foundation is not a major player. The Ethereum Foundation, led by Vitalik Buterin, is responsible for Ethereum's development. I checked the information, and in August this year, a mining pool published an article stating that the Ethereum Foundation holds 273,000 ETH, which only accounts for 0.25% of the total supply. Therefore, Vitalik and the Ethereum Foundation selling coins at most has an emotional impact, and overall, the sell-off hasn’t caused much pressure.

Second, during the PoW period, PoW mining pools were one of the main players. Miners could only mine by joining a mining pool, which takes a portion of the profits, and the mining pool has many chips.

Third, after the transition to PoS, PoW mining pools can no longer continue to absorb chips through providing mining programs. Therefore, new mining pools, such as Lido, have emerged. I prefer to call them PoS mining pools.

Fourth, many voices criticizing PoS may come from the original Ethereum miners. Because PoS has changed their mining participation method, it has taken a portion of their 'cake'. In fact, PoW, retail investors buy graphics cards, pay electricity bills for mining, and mining pools centralize computing power and provide mining programs. PoS, retail investors stake ETH for mining, and mining pools centralize ETH and provide or connect validator nodes. From PoW to PoS, there may not be much difference. The issue may lie in this transitional phase; we should still be in this transitional stage.

Fifth, if there is a difference, the only difference is the lack of cost support from PoW; however, the ecosystem also lacks a large-scale participatory narrative like ERC20 DeFi. This leads to a decrease in ETH production costs, but there is no significant demand activation. However, this may also be related to the transition since the performance of ETH prices also affects the ecosystem. The lack of applications has always been a problem in my opinion.

From PoW to PoS, this is a process of transition; it is an open strategy. Although before switching to PoS in September 2022, PoW mining pools may have sold some, it shouldn't be a complete liquidation. After all, they also need to wait for ETH to rise before selling, which explains why ETH isn't moving up.

In addition, once the Ethereum ETF is approved, the issuance of the ETF requires spot assets, and the scale of ETF institutions may gradually become one of the main players. (The approval of the Ethereum ETF during this transition phase is optimal; during the transition, institutions may find it easier to intervene.)

Finally, based on this logic of transition, the ETH market needs to wait for the transition to complete. New main players or new whales need to accumulate enough chips before it can start.

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