4 tokens set to benefit from the Merge

Posted: 1 September 2022 4:44 am
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If ETH’s price experiences a Merge surge, some of the tokens in the Ethereum ecosystem may benefit, as well

This is not an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade or use any services.

“The Merge” is being anticipated as one of the biggest events in crypto history.

Slated to occur around September 13, 2022, the Merge refers to when Ethereum will transition from a proof of work (PoW) to proof of stake (PoS) blockchain.

Some believe that Ethereum’s transition to a PoS protocol will be a boon for ETH’s price in the long run.

And if the Merge does serve as jet fuel for ETH’s price, then many of the tokens in the Ethereum ecosystem will also likely see a price rise.

Let’s discuss why the Merge may benefit the price of ETH before discussing some of the tokens in the Ethereum network that may also benefit from the Merge.

What tokens might benefit from a post-Merge Ethereum network?

If the Merge catalyzes a rise in the price of ETH, it will also likely result in a rise in the price of tokens in the Ethereum ecosystem.

Here are a few tokens you may want to keep an eye on:

Lido DAO (LDO)

LDO is a governance token for the Lido DAO.

Lido DAO controls one of the largest liquid staking platforms for ETH. About one-third of all staked ETH is staked through Lido.

Holders of LDO obtain voting rights in the DAO, which governs how the Lido platform operates.

Keep in mind, though, that the top 100 LDO wallets hold more than 95% of the supply, which means these holders will dominate votes. This minimizes the influence of other LDO holders.

But value isn’t always intrinsically linked with price, and LDO has recently risen in price alongside ETH’s rise in price.
How to buy Lido DAO

As of Sep 29, 2022, LDO is trading at approximately 78% of its all time high.

Lido DAO current price: $1.62
All time high: $7.30

Rocket Pool (RPL)

Rocket Pool is another liquid staking protocol for ETH, but RPL’s tokenomics are a bit different than LDO’s.

Rocket Pool node operators not only have to stake 16 ETH on behalf of the protocol, but they also have to stake a minimum of 10% (and a maximum of 150%) of the value of the ETH they stake in RPL.

To join Rocket Pool’s oracle DAO, you have to post an “additional significant RPL bond,” according to the protocol’s Medium page. The more RPL you post, the more voting rights you have.

Rocket Pool’s incentivizing its network participants to stake and lock up their RPL reduces the liquid supply of the token, which can cause the token’s price to rise.
How to buy Rocket Pool (RPL)

As of Sep 29, 2022, RPL is trading at approximately 58% of its all time high.

Rocket Pool current price: $24.99
All time high: $59.46

Staked ETH (stETH)

You receive stETH when you stake your ETH with Lido.

Receiving stETH in exchange for locking up your ETH is what makes Lido a “liquid” staking solution.

The price of stETH should mimic the price of ETH, as stETH is like a placeholder asset for ETH.

But the two assets don’t always trade at parity, and this presents an arbitrage opportunity.

How to buy Lido Staked Ether (stETH)

As of Sep 29, 2022, STETH is trading at approximately 72% of its all time high.

Lido Staked Ether current price: $1,338.64
All time high: $4,829.57

Ethereum Classic (ETC)

Because the hardware used to mine Ethereum will become virtually worthless if Ethereum pulls off its transition to PoS, some pre-Merge Ethereum miners may begin to mine Ethereum Classic (ETC) – which is still a PoW chain – with their mining gear.

In what seems like the unlikely event that many miners begin to mine ETC and many developers begin to develop on the blockchain, ETC’s price may continue to go up.

And even without developer activity on the chain, ETC tends to pump when the entire crypto market pumps regardless.

So, it may be worth keeping an eye on ETC’s price, especially if miners flock back to mining this token.

How to buy Ethereum Classic (ETC)

As of Sep 29, 2022, ETC is trading at approximately 83% of its all time high.

Ethereum Classic current price: $27.65
All time high: $167.09

In closing

ETH likely won’t be the only token whose price benefits from the Merge.

A number of other tokens in the Ethereum ecosystem may also get a pump as the Merge nears and post-Merge.

Keep in mind, too, that the four tokens other than ETH mentioned in this piece all have higher beta than ETH – which means they are further out on the risk curve and, therefore, more volatile. Trade carefully.

Trying to get a handle on the markets? Cut through the noise with our overview of the best cryptos to buy right now, explore some strategies for how to trade crypto or see if there's a better platform for you with our guide to the best crypto exchanges.

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Frank Corva owns cryptocurrencies as of the publishing date.

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