The Ethereum Merge, anticipated to be completed in September, has generated significant investor optimism, driving Ether (ETH) prices to briefly surpass $2,000 — a substantial recovery from the June lows around $800. Among the many bullish narratives, the term "Triple Halving" has gained traction. This article explains what it means and explores other positive expectations following the Merge.
What Is the Triple Halving?
The Triple Halving refers to the anticipated deflationary impact of Ethereum’s Merge upgrade, driven by three key factors: reduced issuance, token burns, and ETH staking. Amber Group’s report highlights that the Merge is expected to significantly alter the inflow and outflow dynamics within the Ethereum ecosystem.
Reduced ETH Issuance
Post-Merge, Ethereum will transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), eliminating block rewards for PoW miners. Currently, both miners and validators receive rewards — miners earn 2 ETH per block, while validators on the Beacon Chain receive staking rewards. After the Merge, ETH issuance is projected to decrease by nearly 90%. This reduction is analogous to Bitcoin’s halving events, which occur every four years and reduce mining rewards by half.
Data from ultrasound.money (based on 375 days since EIP-1559’s burn mechanism was implemented) estimates that while 5.5 million ETH were issued under PoW, approximately 2.5 million ETH were burned. This resulted in a net annual supply increase of 2.5%. However, post-Merge simulations suggest that if burning continues at current rates, ETH supply could decrease by about 1.6% annually.
Increased Demand for ETH After the Merge
Amber Group identifies several factors that could boost ETH demand post-Merge.
Enhanced Validator Rewards
Validators will now receive transaction tips (previously a source of miner revenue), potentially increasing their annual percentage rate (APR) by 2–4%. Additionally, validators can earn Miner Extractable Value (MEV) by reordering transactions. According to Flashbots, if 8 million ETH were staked (by 250,000 validators), MEV could add up to 60% extra income to staking rewards. However, with over 1.328 million ETH already staked by 415,000 validators at the time of writing, additional MEV earnings may be lower.
Amber Group estimates that post-Merge staking rewards, combined with transaction fees and MEV (minus validator costs), could yield an annualized return of 8.47%. They also note that staking participation is likely to increase. Compared to other Layer 1 blockchains like Solana (75% staking ratio), Cosmos (64%), and NEAR (39%), Ethereum’s current staking ratio of about 11% (of the total 120 million ETH supply) suggests room for growth. Higher staking participation could eventually reduce annualized returns to below 2%, as reflected in various staking calculators.
Lock-Up Mechanisms and Market Dynamics
After the Merge, staked ETH and rewards will remain locked until the Shanghai hard fork upgrade, expected in six to twelve months. Although this may create selling pressure once withdrawals are enabled, Amber Group believes most rewards will be reinvested into new validators rather than sold. They anticipate that staking demand will outweigh potential selling pressure.
👉 Explore advanced staking strategies
Frequently Asked Questions
What is the Triple Halving in Ethereum?
The Triple Halving describes the combined effect of reduced ETH issuance, token burns, and increased staking post-Merge. It mimics Bitcoin’s halving by potentially making ETH deflationary.
How does the Merge affect ETH supply?
The Merge reduces new ETH issuance by nearly 90% by eliminating PoW miner rewards. If the current burn rate continues, ETH could become deflationary, with a projected annual supply decrease of 1.6%.
What are the expected staking returns after the Merge?
Returns may include base rewards, transaction tips, and MEV income. Estimates suggest an initial annualized return of around 8.47%, though this could decrease as more ETH is staked.
When can staked ETH be withdrawn?
Staked ETH and rewards will be locked until the Shanghai upgrade, expected within a year post-Merge. Transaction fees and MEV earnings, however, can be claimed immediately.
Will there be selling pressure after withdrawals are enabled?
While some selling is possible, analysts expect most rewards to be reinvested. Growing staking demand may counteract any significant downward pressure on prices.
How does Ethereum’s staking ratio compare to other blockchains?
Ethereum’s staking ratio is currently around 11%, lower than Solana (75%), Cosmos (64%), and NEAR (39%). This indicates potential for increased participation and network security.