How did the Merge affect Ethereum?

Short answer

The Merge, completed on September 15, 2022 at block 15,537,394, replaced mining with proof of stake. It cut Ethereum's energy use by about 99.95 percent, reduced new ether issuance by roughly 90 percent and changed who secures the network. It did not make transactions cheaper or faster for users.

Energy

Miners ran huge numbers of GPUs. Validators only need an ordinary computer and 32 ETH at stake. The Ethereum Foundation estimated electricity use fell from tens of terawatt hours a year to a tiny fraction of that.

Supply

Before the Merge, miners earned about 13,000 ETH a day. Afterward, validator rewards came to about 1,600 ETH a day. Combined with the fee burn from EIP-1559, ether supply actually shrank in some busy periods, though it grew again when fees fell after Dencun in 2024.

What did not change

Fees and throughput stayed about the same, since the Merge changed consensus, not capacity. Staked ether still could not be withdrawn until the Shanghai upgrade in April 2023. And the price did not jump: ether fell in the weeks after the Merge alongside the broader market.

Side effects

Miners lost their income on Ethereum. Some moved to Ethereum Classic, and a forked proof of work chain called ETHW launched but gained little value.