As the Ethereum merged on September 15, 2022, investors have been left wondering about its impact on the non-fungible token (NFT) market. Market analysts seem to believe that the Ethereum Merge will be beneficial for NFT projects with regard to ensurance of a wider adaption of the asset class. However, many have expressed concerns that NFTs built around Ethereum can see a price hike. In a conversation, FE Blockchain, Parth Chadha, co-founder and CEO, STAN, a blockchain-based Esports fan engagement platform, talks about how the Ethereum Merge can benefit NFT minting and how it will aid the growth of NFT in markets such as India. (Edited Excerpts)
What will be the outlook of the NFT market post-Ethereum Merge?
The Ethereum Merge was a necessary step to make the digital asset chain energy-efficient, which targeted around 99.5% reduction in energy consumption. While the Merge was and is expected to be an important development in the Web3.0 world, I believe that NFT market will remain unaffected due to this. Rather, the NFT market is expected to be driven by the overall cryptocurrency market sentiments because of the presence of end users. While the Merge has not resulted in the reduction of gas fees, which refers to the amount required to execute a transaction on the Ethereum blockchain, Ethereum aims to be a stable and secure layer-1 protocol while allowing layer-2 protocols to work on the scalability side of things.
How is the Ethereum Merge expected to impact NFT-based gaming and other applications?
I expect NFTs and other gaming tokens to continue following the market sentiments. The Ethereum Merge shouldn’t directly impact any gaming projects and the global trend of Web2.0-based games, gamers, and game developers making the shift to Web3.0-oriented gaming in the upcoming years. However, one of the possible after-effects of the Merge could be that, in the long-run, the uptake of decentralised finance (DeFi) transactions will increase which will lead to the support of NFT minting and sales. As a result, the outcome can benefit NFT-oriented gaming and the Esports community in the near future.
In a developing NFT market like India, how will the Ethereum Merge have an impact?
Ethereum Merge carries the potential to make improvements towards the overall blockchain ecosystem by helping with the fall in gas prices, which in turn would help with increasing the development of layer-2 economies such as the Polygon network. In the upcoming years, I expect the Merge to be one of the primary triggers that would drive mainstream adoption of NFTs in a country such as India, which is currently going through digital asset-oriented developments.
Post Ethereum Merge, will revenue earned from NFTs be subjected to legal implications?
Since this is a technical upgrade, no additional legal implications will be involved. In India, investors can benefit from Ethereum Merge-based applications for NFTs only after the country’s government introduces a set of regulations to give the digital asset ecosystem clarity.
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