How Will NFT Market React To the Ethereum Merger Event?
This year Ethereum turned seven years old, surprising users with a present in the form of the Ethereum Merge. The much-awaited Ethereum Merge is officially scheduled for the 16th of September. The Ethereum Merge will significantly impact the crypto sector, including NFTs and digital collectibles. It is reported that 80% of total NFTs are traded on the Ethereum blockchain and witnessed an eye-popping revenue due to the NFT hype, including the two most famous NFT collections, CryptoPunks and Bored Ape Yacht Club. Therefore, a question arises for NFT creators, what will happen to millions of NFTs after the Merge?
Impact on NFT Market
NFTs are one of the essential sectors of the Ethereum network. After the Ethereum Merge, the NFTs will still be in your digital wallet. According to Adam McBride, if the Proof-of-Work fork remains, then the user will have two versions of NFT. One will be the NFT on the previous Proof-of-Work fork, and the other will be the post-merge Proof-of-Stake NFT. If everything works well, NFTs will actively function on Ethereum’s newly upgraded mainnet.
The Ethereum network is gearing up for the merge mid September. In line with the broader Ethereum community, in the event of a viable PoW fork, Yuga intends to only recognize NFTs on the PoS ETH chain as subject to the relevant NFT license and eligible for Yuga-offered utility— Yuga Labs (@yugalabs) August 17, 2022
The NFT creators and investors might encounter a ‘replay attack’-double transaction, which means that a transaction may happen on the newly merged PoS fork if a user transacts on the PoW fork. Thus, there is a slight chance of compromising the security of NFTs as someone else can access your NFTs or any other digital asset, and your NFTs might get lost through an unknown transaction you never made.
We can even see price discrepancies in NFT floor prices due to this. However, we anticipate that the mentioned impact might not occur, but there is a probability of it, and you should be aware of that.
However, there are some excellent impacts also. The most robust effect will be reduced carbon consumption by up to 90% for minting and maintaining NFTs. In addition, analysts of the crypto sphere predict a sky-high surge of Ethereum after the Merge, and creating NFTs on the Ethereum network will become more convenient and easier.
To save NFTs from possible impacts, users are advised to delist their NFTs from sale and transfer them to their new PoS wallets. However, it is not guaranteed that everything will go as per the plan; users may take necessary steps to protect their NFTs.Source