Let's clear up the facts around EIP-1559, the merge/triple halving and ЕТН becoming a deflationary asset.

I'm finding it incredible just how many people in crypto are confusing the triple halvening/cliffening which comes with the merge and EIP-1559. I have seen multiple YouTubers (and not the shitty bybit link shilling, shitcoin pumping kind) and many people on Reddit thinking that the cliffening is happening in the next month with EIP-1559. The amount of misinformation is frustrating. People are going to look at EIP-1559's respectable change to ETH supply (but not dramatic like the merge) and claim "oOh, LoOk, EIP-1559 diDn'T MaKe eThEReuM DefLaTioNaRy!" When in reality, EIP-1559 was never going to make ETH deflationary except for when gas fees were well into the hundreds of Gwei, something which is unlikely to last now that layer twos are taking off.

Anyway, let me clarify for anyone who is still unsure:

• EIP-1559 will reduce the ETH going to miners by an estimated 30% and burn most of the transaction fees going forwards (it will also make gas fees a lot more stable. No more guessing what to pay to get into the next block!). This means ~30% less constant selling pressure from miners and anywhere between 0.5 and 5% of the ETH supply being burned each year. Most likely about 1-2% of supply per year based on gas fees over the last year. This would still leave ETH with a net inflation rate of about 1.5-3%.

• The Merge/The triple halvening/the cliffening or whatever you want to call it is the move from Proof of Work to Proof of Stake. To do this, we will be merging the ETH 1 PoW blockchain with the ETH 2.0 PoS blockchain (which currently is running in parallel and has no transactional functionality, just staking, so if you stake your ETH, you're moving it to ETH 2 and waiting for a future update to allow for full transactional functionality on ETH 2.0). This upgrade will result in a reduction of annual ETH issuance from 4.5%pa to 0.5%pa since miners no longer need to be paid for all of the electricity they waste when securing the network It is also worth noting that after the merge, Ethereum will be the most secure and most decentralised blockchain with its over 150,000 validators and greater security guarantees from Proof of Stake due to the ability to slash (punish) bad actors. When combined with EIP-1559, this will result in ETH becoming deflationary or "ultra sound money" since the fees burned through EIP-1559 will be greater in value than new ETH given to validators/stakers. This upgrade is currently looking like it will go live in Q1 2022.

Finally, I would like to give my own 2 wei on the effects of these upgrades. For over a decade now the crypto market cycles have revolved around the Bitcoin halvings when the supply of new coins going to miners halves. This is important because miners are majority sellers. They have electricity bills to pay and so the inflation from new coins is almost always being dumped on the market. If halving this amount can consistently create a parabolic run, then what do you think will happen when Ethereum gets rid of it entirely? There will be no automatic sellers and what little ETH is given to validators will be less likely to be sold as stakers by nature are ETH holders and don't have electricity costs to offset. Meanwhile, ETH is still sitting at a middle ground ETH/BTC ratio compared to the low and its 2017 highs set in a time when ETH had no apps, no DeFi, barely any NFTs except crypto punks, ETH 2.0 and PoS were still a pipe dream and there were no layer 2 scaling solutions. At some point the market will realise the significance of this supply shock and the price will adjust accordingly. Until then, I will keep on stacking ETH.