Ethereum mining revenue rose to a three-month high due to increased interest in mining rewards in August. This was the last full month of mining ETH before ‘The Merge.’
Ethereum mining has consistently provided mining companies such as Marathon Digital Holdings, BitDigital, Bitfarms, Riot Blockchain Inc., Hut 8 Mining Corp, and Argo Blockchain monthly revenue.
The announcement of the transition to a proof-of-stake (PoS) network was first made on Dec. 1, 2020. The transition has finally been slated for this month, causing an increase in demand for ETH mining rewards since they will be scrapped and replaced with staking interests after the successful completion of The Merge.
As a result, Ethereum mining revenue rose to approximately $734 million in August from $621 million in July, according to The Block based on data from Coin Metrics. This was an 18% increase in revenue in 31 days.
Ethereum miners suffered from a bearish market
After the collapse of the algorithmic stablecoin TerraUSD (UST) in the second week of May, Ethereum mining revenue was able to cross $1 billion despite the significant decline in its price during the month.
This crossed over to June when less than $600 million was generated from contributing power to the validation of transactions on Ethereum’s proof-of-work (PoW) network.
Throughout June, ETH traded in the range of $896 to $1,965. In July, the novel asset behind the Ethereum ecosystem traded between $1,019 and $1,774.
Because mining revenue is calculated by the number of ETH mined multiplied by the price of the coin at a given period, there was a substantial plunge in revenue.
ETH price and the Merge bolstered revenue
The two-step process for the Merge roll-out was announced by the Ethereum Foundation on Aug. 24. The first step involves a network upgrade called Bellatrix on the consensus layer that is scheduled for 11:34:47 AM UTC on Sept. 6.
The second step, dubbed Paris, constitutes the execution layer’s portion of the transition and is scheduled to be triggered between Sept.10 and 20.
The transition to a PoS network will see Ethereum join other blockchains like Cardano that are trying to find the perfect balance to the blockchain trilemma (security, decentralization, and scalability).
The anticipated reduction in gas fees and increase in the use of decentralized protocols on Ethereum saw a rise in the demand for ETH.
Within the period, ETH traded in the range of $1,428 and $2,023 after opening and closing at $1,681 and $1,554 respectively.
While miners will earn ETH rewards for a short period before the transition takes place, many of them have turned to other PoW coins such as Ethereum Classic (ETC) and the recently created Ethereum Proof-of-Work (ETHPOW), which can be traded on Gate.io, MEXC, Poloniex, and DigiFinex.