NFT Ecosystem To Benefit From Ethereum Proof-of-stake

Post-Merge NFTs should function as usual on marketplaces and within dapps

article-image

Blockworks exclusive art by Axel Rangel

share

key takeaways

  • NFT projects and owners can expect no impact on NFTs they own
  • ESG component has been primary deterrent for environmentally-conscious brands building on Ethereum

The Ethereum Merge has taken place. It’s goal: to migrate the blockchain from proof-of-work (PoW) over to a more environmentally friendly and theoretically more secure proof-of-stake (PoS). But what does it mean for NFT holders?

The Merge will not increase throughput of the network, and gas prices will likely not go down, but the upgrade may pave the way for lower gas fees via sharding down the line. And NFTs built on Ethereum will not be affected, experts said.

One implication to consider, however, is duplicate NFTs, according to Ankush Agarwal, chief architect of Co:Create. 

“The ‘old NFTs’ will be [duplicated on any forked] PoW chain and could cause some confusion if projects are not updated. All major players — Coinbase, OpenSea, LooksRare — have made statements that they will only be supporting the PoS chain, so hopefully the impact will be minimal.”

Proof-of-stake Ethereum changes the NFT energy narrative

As a result of the Merge, the energy consumption on Ethereum drops by 99.9%, which may be impactful for NFTs, as it undercuts a primary narrative espoused by critics of the tokens.

“There’s been an incredible amount of misinformation about the energy consumption of NFTs, but this migration will put even the most vocal critic’s concern to rest,” said Jonathan Victor, head of Web3 and NFTs at Protocol Labs.

Some of those critics include Hollywood stars and game developers in San Francisco who are energy and environmentally conscious, according to Jack O’Holleran, CEO of SKALE labs.

SKALE’s multi-chain network collaborates with brands and artists to mint and manage NFTs on Ethereum. The first question major brands ask is if their technology is energy friendly, mainly because “they care about their optics,” he said.

Ethereum has been widely branded as an ecosystem that is not energy friendly, which has deterred many from building NFT projects on Ethereum and turning to other chains like Solana and Polygon. Nevertheless, Ethereum remains the largest and most popular blockchain for NFTs.

Since most industries are targeting net zero emissions by 2050, the Merge may get ETH substantially closer to this goal.

Victor added that this doesn’t solve every problem for ETH: “If folks want lower gas fees, they’ll still need to use L2s like Optimism or Arbitrum.”

In the meantime, NFT owners should remain cautious about hacks, scams and suspicious links that request to migrate any crypto or NFTs.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (1).jpg

Research

With $13B in tokenized assets, strong institutional partnerships, and a clear first-mover advantage in the RWA space. The platform's methodical approach to regulatory compliance, coupled with its hybrid public-private architecture, positions it uniquely to capture significant market share in the emerging tokenization landscape. While current fee generation primarily stems from metadata transactions, the planned launch of Figure Markets, major exchange listings, and comprehensive market-making initiatives in 2025 could serve as powerful catalysts for growth.

article-image

Perena is built on the premise that as stablecoins proliferate, liquidity could fragment, and stablecoins aren’t useful if they aren’t liquid

article-image

From hackathons to trading tools and DAO governance, AI agents are redefining how we build and innovate

article-image

CME’s large bitcoin contracts are so big that investors are turning to micro bitcoin contracts

article-image

The third-largest stablecoin is going multichain for the first time in its seven-year history

article-image

Nano Labs’ news release notes confidence in bitcoin being “a reliable store of value amidst its rising global adoption”

article-image

Several big companies report third quarter earnings this week, likely moving markets