💍 How to play the ETH MERGE

AuthorAuthor

Arvind Krishna & Aakash Athawasya
August 31, 2022

Kaise ho bhaiyo aur bheno! This is your one and only doodhwala, we’re like that nice friend who won’t tell your parents you ate chicken that one time in school.

Speaking of nice friends, we spoke to a nice friend today.

He’s got the LOWDOWN on the hottest topic in crypto rn:

No, it’s not which exchange the ED is gonna raid next or WTF happened to web4.

But he’s got all the facts about the biggest SHAADI in crypto.

👉 The Ethereum MERGE 👈

(and if you can’t tell by the caps, we’re hella excited about the MERGE)

So, get your big fat wedding plates ready and let’s dive in.

What’s happening with the Ethereum MERGE?

It’s Wednesday!

This means either you’re done with a long weekend, or you’re about to start one.

Either way, we’ve got a 🔥 Desi DeFi Degen read for you.

Last week we spoke to an OG crypto buidler.

This week we are in convo with one of the most degen-degens out there.

He’s so degen, he’s got an Anime character as his PFP on Twitter.

Now, that’s intense. 🥶

(I know all you Naruto stans are screaming.😉)

We spoke with Akash Girimath, and it’s not just because he has a baller first name.

Seriously, who’s Akash:

  • Analyst for FXStreet

  • Professional Crypto Twitter shitposter

  • Manga/anime geek

  • A great first name bearer

Man’s been digging into the Ethereum MERGE for a year now.

That’s longer than most VCs bros have been in “excited about web3” #shade

Let’s get into it.

🍼 If you had to explain The MERGE to a 10-year-old, howya do this?

Ethereum right now is like trying to ride a bicycle with deflated tires and brakes pressing on the tires.

The faster you try to move the more friction it provides.

But the MERGE is an upgrade that will help inflate the cycle’s tires.

This way the brakes aren’t stopping the cycle.

Damn bruh, only wish I learned to ride a cycle. 😢

🍼 This MERGE is too technical for my state board brain, what means all this?

Okay, here goes nothing:

  • The Ethereum blockchain is currently on proof-of-work (POW), which includes mining and providing your computer card’s resources to mine blocks which contain transactions and other data

  • Since you work to mine a block, you are rewarded in ETH

  • The MERGE basically replaces this mining structure with something called as proof-of-stake (POS)

  • In this type of structure, instead of miners mining, you just stake your ETH as collateral

  • The blockchain approves transactions, and rewards you with ETH

  • POW is bad to the environment but POS is friendly

  • Miners are opposed to this shift from POW → POS, so they are gonna take the Ethereum code and fork it into a new chain

  • So, around the date of MERGE, ETH will spilt into ETH1 (POS) and ETH2 (POW)

  • The consensus is that ETH1 will succeed since Ethereum Foundation, investors and developers are in support

Got it?

Je suis understand.

🍼 What tf do you think ETH will do around all this? And which ETH are you talking about.

Ethereum price has rallied 131% anticipating the MERGE, but honestly, I think the narrative is dead.

Here’s my playbook:

  • MERGE = bullish, investors get into ETH and related coins L2s or anything related to ETH (ETC, MATIC, OP, LDO to name a few)

  • capital moves from these tokens to other L1 tokens → EOS, FTM, NEAR, ATOM, etc.

  • Tbh The MERGE maybe a sell-the-news event

Based on data from complex derivative products like options, call options aka options to buy an asset are going for hella premiums in Sept.

Why?

Because of The MERGE obvi.

But moving to October, the data suggests investors are steering clear of ETH.

They’re just here to play with the volatility.

As for the airdrop - ETH1 (POS) will be the winner supreme.

ETH2 may provide an opportunity for risk takers. But I like to think of ETH2 as a matchstick that burns brightly for a few seconds and then there's darkness.

Once more, but S L O W E R this time. And preferably in English. 🥲

🍼 What questions should Indians ask Indian exchanges about The MERGE?

First question — why is your content not as 🔥 as the doodhwala

And then:

  1. How/if are ya’ll planning to facilitate the ETH forks?

  2. When will ETH futures trading be stopped? And for how long?

  3. How are they planning to handle the oracle related problems if they have a DeFi platform like lending/borrowing?

Are ya listening exchanges?!?

🍼 Give us that sweet sweet next bull market alpha?

Alright, I’m being real with you. The only alpha is reading the doodhwala.

But seriously, here’s my take:

💀 BTC and ETH head into the macro bottom levels + Layer 1 tokens are still seeing massive investor interest, except a few notable ones, most will die

👌 zero knowledge (ZK) projects surrounding ETH will be a good play going into the next cycle

🎭 the sector that will probably rip is NFT tokens which, IMO, is similar to the meme coin category that saw massive gains between 2020-2021

🎮 beyond this, the Web3 sector, as a whole, has massive opportunity to grow but specifically, I look at blockchain games with a cynical eye + scouting for a game that has decent gameplay and good tokenomics

🔐 privacy coins (XMR, ZEC, ZEN) are going to be back in the picture with regulators going after platforms like TornadoCash

🍼 What are those suit-and-tie investors thinking bout crypto rn?

Big money capital funds are playing a two-sided game.

On one hand they’re long ETH on the spot market, but short ETH on the quarterly.

This is a delta neutral trade aka they make money regardless of market movement.

They wanna hold ETH post-MERGE BUT they’re hedging their positions via shorting quartiles or long-dated futures.

This is their play book:

If ETH price goes up → Spot ETH holdings make money,

If ETH price goes down → The short in ETH quarterlies make money.

Imma need to sit down after reading this.

🍼 Your top-5 crypto accounts to follow and why (apart from the doodhwala ofc)

A list almost as good as the #FabFive.

🍼 And finally — How do you take your DOODH?

Rn?

I’m trynna get SWOLE.

So, I take my doodh with protein! 💪

Big UPPs to G for giving the doodhwala a lesson in the Ethereum MERGE.

He’s done what we couldn’t — make the newsletter sound smart. 🥹

You can bug him with questions about the MERGE, memes, the crypto macro play, his workout routine, why Kakashi killed Rin, layer-1 wars and more here.

Give him a 👋 and let him know the Doodhwala sent ya!

#FractalsForever

Milky Meme Of The Day

There can't be TOO MUCH Naruto content out there. 🤷‍♂️

This is the Narutowala. 🥷

If you want more doodh then, be sure to follow our Twitter (@DoodhwalaDaily)

That’s all for today folks! Naale Sigona!

Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer.

None of what you read here is financial advice. We aren’t here to get you to buy or sell a crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.