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Ethereum transactions monitored by US Government?

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With significant enhancements like the Merge taking center stage, Ethereum [ETH] has surely been the buzz of the crypto town. In addition, the network’s switch to proof-of-stake [PoS] has fueled rumors that ETH will be classified as a security. Now, the SEC asserted in a lawsuit against crypto influencer Ian Balina that ETH transactions that took place in the United States immediately fell under the government’s radar, further bolstering this case.

Balina was accused of selling unregistered tokens, for which it was sued. Before launching an initial coin offering [ICO] in 2018, he failed to register his project as a security. The crypto influencer flat-out refuted these allegations. The crypto community is presently making assumptions about the SEC’s extensive statement in the case, though. The lawsuit claimed that it had the power to prosecute Balina since the SEC has authority over the Ethereum network in the 69th paragraph.

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Source: Twitter

The Balina-curated investment pool reportedly included a range of investors situated in the United States. Additional ETH contributions were validated by a network of Ethereum blockchain nodes. As a result, the SEC claimed,

“ETH contributors were validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country. As a result, those transactions took place in the United States.”

Furthermore, it should be noted that 3340 out of the 7819 Ethereum nodes, or 42.56 percent, are currently located in the US.

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Ethereum’s stance

Following the Merge, there has been a significant backlash against the Ethereum network. As was already indicated, some were speculating that since the network would now be regarded as a security, the SEC would have jurisdiction over it. Others, though, were criticizing ETH’s degree of decentralization.

In the midst of all of this, the network would suffer from the SEC’s most recent pronouncement. Several legal experts pointed out that the wording of the complaint would be observed even if it would not have any legal relevance.

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Source: Twitter

Furthermore, at the time of writing, Ethereum (ETH) was priced at $ 1,361.54 and had taken a plunge of 0.50% over the last 24 hours.

Cardano’s PoS Do Not Lock Users Fund Unlike Ethereum: Charles Hoskinson

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Cardano founder Charles Hoskinson is back in the limelight with his recent Twitter musings. Hoskinson emphasized that Ethereum’s implementation of the Proof-of-Stake consensus protocol was flawed as it restricted investors to access their staked ETH.

A shared discord message from an Ethereum developer revealed that there is still some uncertainty regarding the timing of withdrawals even after the Shanghai upgrade.

This was corroborated by a Twitter user @StakeWithPride who shared screenshots from Discord, saying that there is no ETA [estimated time of arrival] for ETH withdrawals.

Many however expected that holders would be able to access their staked Ethereum immediately after the Shanghai upgrade, slated to be six months to a year from now.

In the subsequent screenshots, the head of Serv.eth Support, Micah Zoltu, claimed that the information about withdrawals resuming only after the Shanghai upgrade comes from exchanges. But he admits that it is crucial at this point to allow investors “to exit in 2023, rather than in 2024.”

Hoskinson- Here’s What Makes Cardano Unique From Ethereum

In a previous post, the same Twitter user claimed to have revealed another screenshot from a conversation with Zoltu, who said that Ethereum stakes do not need to withdraw their ETH right immediately and may wait until later because they are wealthy and can afford to buy expensive specialized hardware.

Charles Hoskinson intervened at this very time, criticizing Ethereum for resembling the Hotel California of the cryptocurrency world, a famous song by the American rock band Eagles.

The song was widely believed as an allegory of self-destruction, and greed in the music industry of the late 1970s.

Hoskinson continued by asserting that because ADA is staked without ever leaving a user’s wallet and can be withdrawn at any time, Cardano’s PoS does not necessitate having users’ ADA locked. As a result, in this case, the “needs of users” are given precedence above stakeholder needs.

The IOG founder further said that everyone can stake Cardano‘s PoS protocol; one does not need to be affluent to do so. He underlined that this is a key area where Ethereum and Cardano differ.

Ethereum PoS nodes being centralized? 2 addresses dominate 40%+ nodes

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The merge was a significant event not just for the Ethereum network alone.  The conclusion of one of the most anticipated events in history was celebrated by the whole crypto sector. Many people and a select few view the network’s switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) as revolutionary. While ETH miners and Bitcoin maximalists opposed this change, the majority of the crypto community was eager to see how it would affect the network.

Meanwhile, there has been a new discovery regarding the PoS nodes. According to Santiment’s analysis, only two addresses control 46.15% of Ethereum’s PoS nodes.

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Source: Twitter

Approximately 188 blocks, or 28.97% of the nodes, have been validated by the first address hours after the Merge, and 105 blocks, or 16.18%, have been validated by the second address. The data became a contentious subject on Twitter as users discussed how the Merge would affect centralization for the biggest network in the globe.

Five firms held 64% staked Ethereum prior Merge

The blockchain analytics platform Nansen published a report before the Merge that showed five firms held 64% of all staked ETH, with Coinbase, Kraken, and Binance accounting for over 30% of ETH staked. Reports also indicated that centralized web service providers like Amazon Web Services control the majority of the 4,653 active Ethereum nodes (AWS).

Ryan Rasmussen, crypto research analyst at Bitwise, further explained,

“Since the successful completion of the Merge, the majority of the blocks — somewhere around 40% or more — have been built by two addresses belonging to Lido and Coinbase. It isn’t ideal to see more than 40% of blocks being settled by two providers, particularly one that is a centralized service provider (Coinbase).”

Since PoS rewards those with a higher token supply over those with a lower one, it is frequently thought to promote centralization. For instance, the Ethereum blockchain’s new consensus mechanism relies on validators, rather than miners, to validate transactions. Participants must stake 32 ETH, which at the time of publication is equivalent to about $48,225, in order to run a validator and be rewarded.

Supporters of PoS, however, contend that the technique is safer and more environmentally friendly than PoW. Vitalik Buterin, the co-founder of Ethereum, predicted that the transition would not only reduce energy consumption by about 95% but also help scale the network, with features that are anticipated to take place in the second half of 2023. Transaction processing is expected to match that of centralized payment processors.

Ethereum’s core devs got their eyes on Shanghai upgrade

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The merge finally transpired after years of waiting. Ethereum’s historic switch to proof of stake occurred early on Thursday morning without a hitch.

The Ethereum merge dominated the attention and energy of the network’s elite cadre of core engineers for almost half a decade, with tens of billions of dollars’ worth of digital assets on the line and no room for error.

Ethereum’s core developers won’t meet in groups or make decisions regarding the network’s future for the next two to three weeks. This break from rapid-fire decision-making, though, won’t last long.

The network’s core developers will have to decide together within the next month whatever features they intend to incorporate in Ethereum’s upcoming update, Shanghai. Within the group, opinions are divided. Again, the decision will have far-reaching financial effects. Ethereum core developer Micah Zoltu told local media,

“Lots of people have lots of things they want to go in [Shanghai], but there isn’t yet consensus on what will actually make it.”

The ability for Ethereum validators to withdraw staked ETH is perhaps the most urgent feature under consideration for the Shanghai upgrade.

The recent merging has changed Ethereum to a proof-of-stake system; as of right now, no longer will energy-intensive “miners” confirm transactions on the Ethereum network, but rather users and organisations who have staked significant amounts of ETH. These organisations will be able to create and accumulate fresh ETH through staking as compensation for demonstrating the processing capacity required to validate transactions and protect the network.

However, ETH can currently only be placed into it’s staking system. It cannot be taken back. Until ETH’s developers introduce a withdrawal feature, the nearly $21 billion in ETH already staked on the network will remain there.

It seems sense that practically every core developer has withdrawal capability at the top of their list of priorities for the Shanghai upgrade.

Next in line for Ethereum

Updates to the Ethereum Virtual Machine (EVM), the developer-focused mechanism at the foundation of the world’s second largest cryptocurrency that establishes the norms dictating how blocks interact on the network, are the second most probable set of improvements to be included in Shanghai. The EVM hasn’t been updated in more than two years, in part because developers would have had a terrible time integrating such enhancements into the merge.

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Source: Twitter

Proto-danksharding, which has to do with the rollups of scaling technology, is another long-rumored ETH feature that has attracted a good amount of interest.

By condensing groups of transactions into a single transaction and presenting it to the ETH blockchain as a single transaction, rollups are solutions that solve the Ethereum mainnet’s sluggish pace and high gas prices.

Proto-danksharding would be the early iteration of danksharding, a method for verifying vast amounts of data on rollups using only a small sample of the total data. Essentially, the change would greatly speed up and simplify the verification of enormous volumes of data on Ethereum layer-2 networks like Optimism and Arbitrum.

Although layer-2 customers find the idea of danksharding to be quite appealing because the upgrade would probably reduce transaction times and gas costs, it would also have a price.

The upgrade will be more difficult and, most crucially, postponed the more complicated the set of features incorporated in Shanghai.

How long it will take to implement Shanghai cannot yet be predicted. However, Van Der Wijden is certain that the improvement will take place in the upcoming year.

However, that deadline likely be postponed as more Ethereum users and developers focus on more ambitious and urgent network enhancements, such as proto-danksharding.

Will Ethereum attract SEC scrutiny? Here’s why it seems like it

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The Merge wasn’t a significant occurrence just for the Ethereum network. One of history’s most eagerly awaited events had happened, and the whole crypto sector rejoiced. The network’s switch to Proof-of-Stake [PoS] from Proof-of-Work [PoW] is viewed as revolutionary by some and harmful by others. The majority of the cryptocurrency community was excited to see how this initiative plays out for the network, despite the fact that Bitcoin maximalists and ETH miners weren’t on board with this shift.

Vitalik Buterin and Joseph Lubin, the creators of the world’s second-largest cryptocurrency, were busy celebrating and thanking everyone involved in the process. While doing so, several of them praised the smooth conversion of the ETH network to PoS. Eli Ben-Sasson, the president of StarkWare, compared the Webb Telescope to the Merge on Twitter.

Along with all the compliments, there was also criticism. As was already indicated, many have noted that ETH was breaking the rules of the cryptocurrency market by allowing the Merge.

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Source: Twitter

Samson Mow poked fun at Ethereum’s seamless conversion to PoS and commented,

“ETH fanboys watching the Merge with anticipation is funny. There can be no technical failures in Ethereum because Ethereum’s existence isn’t predicated on any technology – it already failed in 2016 with the DAO fork. What exists today is a database run by a marketing company.”

SEC to get involved post-Ethereum Merge

Amidst this historic event, Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), reiterated his support for monitoring on Thursday by stating that staked cryptocurrencies may be governed by federal securities laws. This comes after Ethereum switched to a similar system.

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SEC chairman Gary Gensler

The Wall Street Journal quotes Gensler as saying that proof-of-stake (PoS) blockchains, which create new coins for creators who pool their holdings, take on characteristics similar to investment contracts and may fall within his agency’s jurisdiction. The Journal reported that the man claimed he wasn’t referring to a specific coin.

However, the remarks, which came hours after Ethereum successfully completed its PoS shift through the Merge, suggest that the significant technological improvement may have more effects on the second-most popular blockchain than only reducing its energy consumption. Its native ether currency was one of only two cryptos, along with bitcoin, that was explicitly classified as commodities by federal regulators as a proof-of-work chain.

Here’s how Ethereum is rising like a phoenix post Merge

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After years of development and delay, the enormous upgrade of Ethereum known as the Merge is finally under way, transferring the digital machinery at the centre of the second-largest cryptocurrency to a system that uses a great deal less energy.

At the time of publication, the network has officially stopped depending on power-hungry cryptocurrency miners, having reached a critical point of no return.

The long-awaited upgrade is still being watched closely by Ethereum’s core developers, though. The key metrics that will show whether validators, the administrators of Ethereum’s new proof-of-stake network, are acting as expected and adding new transactions to the blockchain’s ledger are still being anxiously awaited by blockchain developers and enthusiasts gathered in Zoom conferences and joyful livestreams.

Switching from the proof-of-work method of running a blockchain to the proof-of-stake method is no easy task. Before the Merge took place, Justin Drake, a researcher at the nonprofit Ethereum Foundation, told local media,

“The metaphor that I use is this idea of switching out an engine from a running car. I like to think of it as kind of like the switch from gasoline to electric .”

If Ethereum’s dress rehearsals for the Merge are any indication, some initial problems are anticipated. But if it works, the benefits will be enormous. Already, Ethereum should use 99.9% less energy than before. One assessment compares it to Finland abruptly shutting down its electrical grid in terms of carbon output.

The network, which is home to a $60 billion ecosystem of cryptocurrency exchanges, lending organisations, non-fungible token (NFT) marketplaces, and other apps, will be upgraded, according to developers, if the Merge is successful in its entirety.

How ready was the Ethereum community to welcome the merge?

There were many methods available to those who wished to view the ETH network’s historic switch to proof-of-stake (PoS) in real-time.

An hour and a half prior to the anticipated time of the Merge, the Ethereum Foundation had organised an Ethereum Mainnet Merge Viewing Party live feed, which promptly went live on YouTube at 4:00 am UTC.

The Merge happened after the network’s total terminal difficulty, which was 58750000000000000000000, was reached. After that, the next block would have been created using a proof-of-stake algorithm.

The Ethereum Cat Herders, writers from Bankless and The Daily Gwei, and other guests are scheduled for The Ethereum Foundation’s live webcast.

Other “notable guests” were also alluded to in the description, possibly including Ethereum co-founder Vitalik Buterin and “The Daily Gwei” founder Anthony Sassano, who have both taken part in testnet live streaming in the past.

Viewers who joined two hours before The Merge could “participate in a POAP art canvas,” according to the YouTube description.

Google, Wenmerge.com, and Blockchain.com all maintained a rolling tally of the current total Total Terminal Difficulty and a projected Merge time for users who desired the most up-to-date countdown to the Merge. BTC.com also has a countdown of its own.

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Here’s how the Ethereum merge will alter the cryptoverse

Ethereum Merge: Talk of the town

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Source: Twitter

Furthermore, now with the completion of the Merge, ETH was priced at $1,632.81 with a steep rise of 2.63% over the last 24 hours.

Ethereum to get ‘Forked’ 24 hours after Merge

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Ethereum has been the talk of the town ever since the transition to Proof of Stake (PoS) was announced. The entire community has been keeping track of all the events leading up to the same. While the majority of the industry seemed to be anticipating a seamless transition, a few of them were hoping for another delay. However, it appears that everything has gone according to plan, and all that is left is for the PoS to launch.

The Ethereum PoW community said that a “hard fork is inevitable” back in mid-August, and that work was already being done to make the hard fork successful. According to information provided at the time, the community had already removed the difficulty time bomb, changed the Chain ID to give replay protection, and finished setting up the testnet, advancing the plans.

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Source: Twitter

The team has now revealed the precise date of the fork’s formal introduction, which is the most recent development. The hard fork will happen one day after Ethereum’s Merge materializes, according to their most recent Twitter thread. Notably, the latter is scheduled for September 15, implying that the former would likely be launched on 16 September 2022.

The Ethereum PoW team tweeted to elaborate further on this,

“ETHW mainnet will happen within 24 hours after the Merge. The exact time will be announced 1 hour before launch with a countdown timer and everything including final code, binaries, config files, nodes info, RPC, explorer, etc. will be made public when the time’s up.”

Furthermore, the block height of the Merge block “plus” 2048 EMPTY blocks will be the starting point for the mainnet. As a result, the first block on ETHW that might include any transactions will be the Merge block + 2049.

The company also disclosed that the initial mining difficulty will not be less than ~220 T, which translates to 15 TH/s in terms of hashrate.

Ethereum miners to lose significance

Miners will become less important on the Ethereum network after the Merge. Ethereum miners made $1 billion more than Bitcoin miners did the previous year. The advantage held by Ethereum miners has persisted from this year to the present. However, by mid-September, the income figure is expected to decrease to zero. Colin Wu tweeted the precise numbers after tallying them up,

ETH miners earned 11 billion, 18 billion, and 2 billion in 2022, 2021, and 2020, compared to 10 billion, 17 billion, and 5 billion for BTC miners. Ethereum miners’ income will likely be reduced to 0 after this week.

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Source: Twitter

Ethereum: It’s showtime for last shadow fork

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A much-anticipated update concerns Ethereum [ETH] and its significant transition to the Proof-of-Stake [PoS] space. The entire community has been keeping track of all the events leading up to the same. A few in the sector were anticipating yet another delay, even though the majority appeared to be expecting a smooth changeover. The ETH community, on the other hand, decidedthe decision to walk the ramp with flying colors and disprove the rest that seems to think otherwise.

The developers of Ethereum (ETH) have announced that the prerequisite shadow forks necessary for the eagerly awaited blockchain upgrade known as The Merge have been completed successfully. Shadow forks assist programmers in stress testing synchronisation hypotheses to guarantee network security during ongoing upgrades. On 11 April 2022, Ethereum engineers implemented the first shadow fork in response to The Merge.

Nearly six months after the last shadow fork, Mainnet-Shadowfork-13, the Ethereum research and engineering firm Nethermind declared that the transition was successful, indicating that the network was prepared to switch to a proof-of-stake (PoS) consensus method.

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Source: Twitter

Among other features, the testnet gave Ethereum developers the chance to practice running nodes, deploying contracts, and testing the infrastructure. Shadow forks, therefore, enable developers to assess the effects of network upgrades in advance. The community must update their Ethereum clients and execute the combination of an execution layer and consensus layer as part of the upgrade.

Alexander Höptner, the CEO of cryptocurrency exchange BitMEX, emphasised the importance of paying close attention during the Ethereum update to prevent service outages. Höptner remarked in a statement to the local media,

“You have to be just, let’s say, awake and see what happens. There’s a chance for high volatility. And so you have to make sure that your services are up and running. […] We don’t expect any major disruptions outside of volatility.”

The CEO went on to say that community support would be crucial to The Merge’s success.

Ethereum creator is grateful to Dogecoin killer community

The creator of the world’s second largest cryptocurrency, Vitalik Buterin, has once more acknowledged the Shiba Inu Community for its contributions to the development of the cryptocurrency in a series of tweets. He most recently provided a second update on Balvi in a series of tweets.

With the development of the coin, Buterin and the Shiba Inu community have cultivated a cordial relationship. Ryoshi, the developer of SHIB, gave Buterin 50% of the Shiba Inu supply at the time, or roughly 500 trillion tokens. Even the claim that Vitalik Buterin is one of the Shiba Inu breed’s original founders has been made by others.

At the tiem of writing, Ethereum was priced at $1,720.40 with a daily rise of 0.25% over the last 24 hours.

Ethereum Staking Services Implemented by Swiss Bank SEBA

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The Ethereum merge’s anticipation has put forward support from around the globe. In preparation for the network’s awaited merge event later this month, the Swiss-regulated cryptocurrency platform SEBA Bank has introduced ether staking solutions for large clients.

According to a statement from the bank, the much-touted institutional-grade offering enables its users to earn rewards on their ether holdings on a monthly basis.

Post-merge, variable lock-up periods will be implemented. The Beacon Chain for Ethereum cannot accept any staked ether until after a subsequent network upgrade called Shanghai, which is anticipated in the second quarter of 2023.

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Ethereum Staking Services Implemented by Swiss Bank SEBA 13

Ethereum merge- the much-anticipated event

One of the most eagerly awaited and important developments in the project’s history is the Beacon Chain merging with its Mainnet, which is scheduled to occur around September 15.

The event lays the foundation for switching ethereum from Proof-of-Stake, which is thought to reduce energy consumption by more than 99% and increase network scalability and security.

With the switch to PoS, miners will be replaced by validators. Approximately 422,000 validators are active at the moment, staking 13.5 million ether, or roughly $20.5 billion at the current exchange rate.

A validator, in this case, controlled by the bank, will be activated on behalf of users who deposit more than 32 ETH (roughly $48,500) to SEBA.

With the launch of its Earn product in October of last year, the bank first introduced Cardano, Polkadot, and Tezos to the market. Ether rewards on SEBA now join those PoS offerings.

The Swiss Financial Market Supervisory Authority (FINMA)-a regulated organization, which was initially founded by former UBS investment banking platform employees, provides large clients with custody and cryptocurrency storage solutions.

Nearly a year ago, it became the first company in the nation to be granted an institutional CISA license by FINMA, enabling it to provide custody services to Swiss mutual funds and investment schemes using liquid crypto.

Here’s how the Ethereum merge will alter the cryptoverse

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A much-anticipated update concerns Ethereum [ETH] and its significant transition to the Proof-of-Stake [PoS] space. The entire community has been keeping track of all the events leading up to the same. A few in the sector were anticipating yet another delay, even though the majority appeared to be expecting for a smooth changeover. Numerous of them have been indicating their support for the same amid this. Several platforms have halted ETH trading as the network gets ready for this eagerly anticipated update.

However, the price of Ether (ETH) may decouple from other crypto assets after the Merge, according to crypto analytics company Chainalysis, with staking yields perhaps driving significant institutional adoption.

According to a report released by Chainalysis on Wednesday, the future Ethereum upgrade would give institutional investors access to staking yields that are comparable to those of some securities, such as bonds and commodities, while also becoming much more environmentally friendly.

According to the paper, ETH staking is anticipated to provide stakers with an annual yield of between 10% and 15%, making it a “enticing bond alternative for institutional investors” given that treasury bond rates provide substantially less in comparison.

The report further stated,

“Ether’s price could decouple from other cryptocurrencies following The Merge, as its staking rewards will make it similar to an instrument like a bond or commodity with a carry premium.”

Has the number of Ethereum stakers been affected?

Chainalysis data shows that from fewer than 200 institutional ETH stakers in January 2021 to about 1,100 as of August this year, the number of institutional ETH stakers—those with $1 million or more in ETH staked—has “been gradually expanding.”

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Source: Chainalysis

According to the company, if this figure rises more quickly after The Merge, this should support the claim that institutional investors “do indeed view Ethereum staking as a good yield-generating strategy.” The Chainalysis analysis predicts that after The Merge, ETH will attract more institutional and retail traders since the upcoming update will make staking a much more appealing investment instrument.

ETH that has been staked is currently trapped in a smart contract that cannot be released until the Shanghai upgrade, which will occur six to twelve months after the Merge. Due to the current lack of liquidity in the staked ETH market, some staking service providers offer synthetic assets that approximate the value of the staked Ether. The disadvantage, according to the firm, is that “such synthetics don’t always retain a 1:1 peg.”

Furthermore, this week, ConsenSys, the organisation formed by Joseph Lubin, a co-founder of Ethereum and the creator of the MetaMask wallet, also released a research examining the “effect of the Merge on Institutions.”