ETH Token

Ether (ETH) is the native token used by the Ethereum blockchain and network as a payment system for verifying transactions. ERC-20 is the standard for creating smart contract-enabled fungible tokens to be used in the Ethereum ecosystem.

Ethereum Mining is a computationally in-depth work that requires a lot of time and processing power. A miner gets rewarded for providing solutions to challenging math problems via blockchain technology, just like bitcoin mining. Ethereum is the first 'world computer'. Mining is the lifeblood of proof-of-work. Ethereum miners - computers running software - using their time and computation power to process transactions and produce blocks.

The Merge

The Merge represents a significant update to Ethereum’s current blockchain consensus mechanism. In short, the transition will see Ethereum shift from a mining-based proof-of-work (PoW) blockchain to a more energy-efficient, scalable proof-of-stake (PoS) system. This will be achieved by joining Ethereum’s mainnet with its PoS-based system, referred to as the Beacon Chain.

Ethereum, the industry’s second-largest cryptocurrency project by market cap, provides infrastructure for blockchain developers to build and deploy their own decentralized applications (dApps) and cryptoassets.

Prior to The Merge, transactions sent over the Ethereum network were verified and added to its blockchain via a PoW system. PoW involves cryptocurrency miners — who compete to verify transactions on the network — racing to generate a solution to a difficult (and therefore energy-intensive) mathematical puzzle. You can learn more about proof-of-work mining in our Learn Center article What is Bitcoin Mining?

After The Merge, Ethereum’s miners will be replaced by stakers, who lock up ETH for the right to validate transactions. In doing so, The Merge is expected to reduce energy usage on the network by more than 99.5%.

Additionally, The Merge lays the foundation for future upgrades planned for Ethereum. Proposed network scalability improvements, like sharding, can only work under a PoS consensus model. Sharding is a technique of splitting a blockchain into smaller, independent shard chains in order to reduce network congestion and increase transaction throughput. The implementation of sharding is planned during subsequent phases of Ethereum’s ongoing development roadmap.

• The Merge is the Ethereum blockchain's transition from a mining-based proof-of-work (PoW) blockchain to a more energy efficient, scalable proof-of-stake (PoS) system
• The Merge is expected to lay the technical foundation for future scalability improvements on the Ethereum blockchain
• ETH holders do not need to take any action before, during or after The Merge takes place

Methodology

In this dashboard, We are going to check miners’ activity before and after the Merge event. For this, we are going to analyze top popular miners destinations for transferring their ETH tokens and top contracts that these users have interacted with them.

To identify miners, we have to extract their addresses from miner column in ethereum.core.fact_blocks table.

For more specific results, I am going to filter results from 2 months before The Merge event ==(since 2022-07-15) till today.

On the above charts, we can see the top destination of ETH transfers by miners (since 15 July). As we see, most number of these destinations are labeled as Centralized Exchanges (such as coinbase and binance) wallets or Decentralized Exchanges such as Uniswap.

Transfers to these destinations can be because of miners’ will to sell their mined ETH in CEXs or swap them to other assets.

The Top destination in terms of the number of transfers by miners is Lido. The top destination in terms of the number of miners in NFTs Position Manager (in Uniswap) and the Top destination in terms of volume is Figment

• Figment is a Canadian-based blockchain infrastructure and crypto staking provider. Figment develops back-end systems and infrastructure that provide yield on tokens for PoS blockchains.
• Lido (LDO) is a secure liquid staking solution for proof-of-stake (PoS) cryptocurrencies that supports Ethereum 2.0 (The Merge) staking and a growing ecosystem of other Layer 1 PoS blockchains. Users can stake their PoS tokens on Lido and receive a tokenized version of their staked assets at a 1:1 ratio
• On Uniswap v3, liquidity provider (LP) positions are represented as NFTs (ERC-721 tokens) as opposed to the fungible ERC-20 tokens on Uniswap V1 and V2. Based on the pool and your parameters selected on the liquidity providing interface a unique NFT will be minted representing your position in that specific pool.

On the above charts, I have extracted the top contract addresses (and their label) that ETH miners have interacted with them during 2 months before the Merge event till today.

As we see, Uniswap | Swap Router are by far the top popular destinations by ETH miners. This can mean that most miners have sent their mined token to these platforms in order to swap them out to other tokens.

There are also some destinations with similar purposes such as 1Inch exchange, Metamask Swap Router and NFT positions in the top popular list.

Uniswap is the top decentralized exchange on Ethereum that enables peer-to-peer market making. Uniswap is also a cryptocurrency whose symbol is (UNI). The Uniswap platform enables users to trade cryptocurrencies without any involvement with a centralized third party

1inch is also an exchange aggregator that scans decentralized exchanges to find the lowest cryptocurrency prices for traders, and is powered by its 1INCH utility and governance token. 1INCH is used to furnish the platform's decentralized "instant governance" model, and facilitates liquidity mining through token staking

On the above charts, we can see daily number of ETH transfers by Miners (and non’miners) since 2 months before the Merge event till today.

We can obviously see there was high activity and volume of ETH transfers to CEXs by Ethereum miners over time till 1-2 days after the Merge event. After this timespan, we can obviously see the dramaticall decrease of miners’ ETH transfer to Centralized Exchanges.

This high activity of miners’ ETH transfers to Centralized Exchanges (and after that, selling ETHs) can be one of the main reason behind the ETH price decrease during the days before and after the Merge event.

And on the above charts, we can obviously sense the decreasement of ETH transfers to CEXs by Miners after the Merge event. As we see, Especially in volume, the transfer activity of miners to the Centralized Exchanges before the Merge event is way more than after Merge.

And on the left charts we can see Top 5 ETH senders to the Centralized Exchanges since 2 month before the Merge event in both terms of number and volume of transfers.

As we see, Etheremine by far has transferred most number of ETHs to CEXs.

Ethermine is the top Ethereum mining pool and a multicurrency platform that allows users to mine Ethereum, Zcash, Ethereum Classic, Beam, Ravencoin and Ergo. Ethermine offers a PPLNS mining system to accommodate users who prefer the pool to solo mining.

On the above charts, despite CEXs transfers, the trens for ETH swaps are not so obvious but we can almost see the light increase activity of ETH swaps during the last days before the Merge event (especially in number of miners) over time.

For a better understanding, lets check the below pie-charts that indicate the average daily swap activity of ETH by miners before and after the Merge event:

And on the left chart we can see top 5 miner with the most number and volume of ETH swaps during 2 times before the Merge event till today.

As we see, Satoshifishi is the most active ETH swapper among miners and the miner with 0xee2826453a4fd5afeb7ceffeef3ffa2320081268 address has swapped out the most volume of ETHs.

As we see, the number of ETH swaps and also swappers (miners) before the Merge event is slightly more than after the Merge. But, in terms of volume, the number of swapped ETHs after the Merge events is more than swap volume before the Merge update.

First of all, on the above charts, I have charted the ETH price from 2 months before Merge till today and split it into before and after the Merge event (left chart) and also I have extracted the ETH balance of miner addresses during the same timespan.

It is obvious that since 1 month before the Merge event, ETH price has experienced a significant decrease over time till today, especially after the Merge upgrade. The huge decrease in ETH balance of miners can be one of the main reasons behind this price decrease.

As we see, The miners’ ETH balance is dramatically decreasing over time to the extent that it reached its lowest amount exactly on 15th September (The Merge Date).

ETH (and its derivates) swap activity days before and after the Merge event by Miners

On above, we have realized that decentralized exchanges such as Uniswap, 1inch and Sushiswap are some of top popular destinations of ETH miners to send their Miners to these platforms. So, I have decided to analyse ETH (and its derivates such as stETH, cbETH, ….) swap activity in the same timespan (2 months before the merge till today) as below:

Based on the Decrypt.co article, Miners Sold Nearly 15,000 Ethereum Leading Up to the Merge and they appear to have cashed in big leading up to the network’s highly-anticipated merge event.

Ethereum miners have sold over 14,785 ETH, totaling $19.73 million as of today’s price, from September 9 up to the day of the merge, according to data from OKLink. OKLink pulls mining data across a dozen different mining pools, including F2Pool, Binance, and BTC.com On September 12, the miners reduced their holdings by 2,767 ETH, followed by another 4,121 ETH the next day. The largest sale came on September 14, the day before the Ethereum merge. Miners at that time offloaded nearly 8,032 Ethereum, contributing to the asset’s drop from $1,636 to $1,471 in less than 24 hours.

Ethereum’s exchange inflows also hit a high before the merge. On September 14, exchange inflows peaked at 2.4 million ETH, according to data from IntoTheBlock.

High exchange inflows are typically viewed as a bearish event as traders move funds from cold wallets to be sold on the open market. Conversely, high exchange outflows indicate that users move funds off these platforms to their cold wallets for long-term holding.

“ETH reserves of miners have decreased dramatically, up to -22% in the last seven days,” Juan Pellicer, a researcher at IntoTheBlock, told Decrypt.  “It is unclear if these outflows were all sent to exchanges to sell.”

Conclusion

Based on the above analysis, There was huge activity of miners with their mined ETHs during days and weeks before and after The Ethereum Merge upgrade. This activity was even higher on their ETH transfers to Centralized Exchanges.

The number of destination with labels such as CEXs’ wallets and also the decentralized exchanges such as Uniswap, 1Inch Exchange and etc… were more than other types of destinations.

Also the miners ETH balance have quite positive correlation with ETH price over time, As we were getting closers and closer to the Merge event, The ETH balance of Miners addresses have also decreased over time.

Also the article from Decrypt.co was the proof to our analysis that miners selling ETH activity was one of the main reasons behind the decreasment of ETH price during the days before and after the Merge event.

Discord: Ali3N#8546

And on the left chart, We can obviously see the number of miners who have less than 1 ETH in their balance have increased significantly over time during the Days before the Merge.

On the other hand, the number of miners with more ETH balance have decreased over time.