Ethereum Merge Can Have a Negative Impact on Defi and Stablecoins!

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According to DappRadar report, the Merge could significantly impact the way DeFi protocols operate on the popular decentralized finance chain.

In an Interview with coindesk, Pedro Herrera, a data analyst at DappRadar, says the Merge’s negative effect on ether market supply could affect DeFi liquidity pools, even if the transition goes off without a hitch.

“If the Merge fails to successfully be launched, we will have delays on DeFi protocols that will affect stablecoins,” Says Herrera

Additionally, The crypto investment firm Grayscale, believes that the Merge may lead to a fork that might have unexpected and unfavorable outcomes.

Grayscale’s concern is that the Merge might create a scenario where stablecoins and tokens locked in smart contracts might not be redeemable. In turn, this can even lead to panic selling creating a substantial amount of sell pressure.