Ethereum's Proof-of-Work Exodus One Month After The Merge

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One month has passed since Ethereum’s successful transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS)—an event widely known as "The Merge." This shift marked the end of an era for Ethereum miners and dissolved a mining machine market valued around $5 billion, along with its formidable 850 TH/s hashrate. Miners faced a clear choice: migrate their resources to other PoW blockchains, exit mining entirely, or wait out the bear market.

In this analysis, we take a closer look at how major PoW blockchains absorbed the migrating Ethereum hashrate. Which networks benefited the most? How sustainable was this influx? We examine the numbers and trends to answer these questions.

Background: The Great Ethereum Hashrate Migration

Ethereum previously used the Ethash algorithm, which was designed to be resistant to application-specific integrated circuit (ASIC) miners. As a result, the majority of Ethereum mining was performed using graphics processing units (GPUs). This made Ethereum’s mining hardware incompatible with ASIC-dominated chains like Bitcoin or Bitcoin Cash.

Consequently, only a handful of PoW blockchains could absorb Ethereum’s GPU-mining hashrate. The primary destinations included Ethereum Classic (ETC), EthereumPoW (ETHW), Ravencoin (RVN), Ergo (ERG), and Conflux (CFX).

Major Proof-of-Work Chains Post-Merge

Ethereum Classic (ETC)

Ethereum Classic originated from a philosophical split in the Ethereum community following The DAO hack. It has maintained Ethereum’s original PoW consensus mechanism.

ETC emerged as the primary destination for displaced Ethereum miners, although a significant portion of the incoming hashrate did not remain long-term.

EthereumPoW (ETHW)

ETHW is a direct fork of the pre-Merge Ethereum blockchain, designed to continue operating under PoW. It adjusted the difficulty bomb to allow smooth mining continuation.

Despite early momentum, ETHW has struggled to retain miners, likely due to a lack of stablecoin support and limited DeFi ecosystem development.

Ravencoin (RVN)

Ravencoin is a Bitcoin fork focused on enabling tokenized asset transfers. It saw a significant price and hashrate surge around The Merge.

The boost in hashrate was closely tied to RVN’s token price, which doubled during the migration period before correcting.

Ergo (ERG)

Ergo is a smart contract platform that uses Autolykos, a PoW algorithm designed to be ASIC-resistant and focused on advanced financial applications.

Ergo experienced the most volatile hashrate changes, indicating low miner retention despite a strong initial influx.

Conflux (CFX)

Conflux is a public blockchain originating from China, which uses a tree-graph consensus structure to improve scalability. It proposed switching to Ethash to attract Ethereum miners.

Although Conflux saw modest gains, it avoided the severe hashrate outflows observed on other chains.

Minor Chains and Overall Impact

Smaller chains like Neoxa, Flux, Firo, and Bitcoin Gold also saw hashrate increases ranging from 4x to 10x. However, due to their small initial size, their share of the migrated Ethereum hashrate was negligible.

Aggregating all the hashrate increases across these chains, we estimate that only about 29% of Ethereum’s original hashrate was redistributed—approximately 250 TH/s. The remaining 60%+ likely left mining altogether or remains inactive.

This exodus has also impacted GPU markets. An estimated 17 million GPUs (RTX 3060 tier) or 42 million older cards (GTX 1060 tier) were used primarily for Ethereum mining. The sudden availability of millions of secondary GPUs has compounded downward pressure on graphics card prices, a trend exacerbated by the ongoing crypto winter.

Conclusion and Future Outlook

The post-Merge hashrate migration reveals several key trends:

  1. Short-Term Influx, Long-Term Retention Challenges: Most blockchains saw a hashrate peak around The Merge, followed by a significant drop-off within days.
  2. Token Price Correlation: Changes in hashrate closely followed the market price of each blockchain’s native token.
  3. Market Contraction: The decline in profitable PoW mining opportunities may lead to further contraction in the GPU and mining hardware markets.

The transition to PoS continues to influence mining economics, and the long-term viability of PoW chains—aside from Bitcoin—remains uncertain. Miners and investors must now navigate a narrower, more competitive landscape.

For those interested in tracking real-time hashrate data and market trends, you can explore live network statistics.

Frequently Asked Questions

What happened to Ethereum miners after The Merge?
Many Ethereum miners migrated to other Proof-of-Work blockchains like ETC, RVN, or ERG. However, a significant portion left mining due to decreased profitability or market conditions.

Which blockchain received the most Ethereum hashrate?
Ethereum Classic (ETC) absorbed the largest share, estimated at around 21% of the migrated hashrate.

Why did some miners leave mining entirely after The Merge?
Factors include low profitability on alternative chains, falling crypto prices, high energy costs, and the large supply of second-hand GPUs flooding the market.

How did The Merge affect GPU prices?
The end of Ethereum GPU mining led to a surge in second-hand graphics card supply, contributing to declining GPU prices amid reduced demand.

Is Proof-of-Work mining still profitable?
Profitability varies by blockchain and energy cost. While some miners continue to operate on smaller chains, margins are generally lower than during Ethereum’s peak.

Will other blockchains transition to Proof-of-Stake?
It's possible, but not all PoW chains are designed for such a transition. Bitcoin, for example, remains committed to Proof-of-Work.