Ethereum takes the first timid steps toward full deflation after adding seven consecutive days of negative issuance. While this may not be a recurring trend, it is certainly an interesting insight into what the network will expect.
Ethereum – Seven days in a row
Against the background of impressive price performance and growing demand, Ethereum (ETH) marks another interesting milestone: 7 days of deflationary issuance in a row. This means that more Etherea was destroyed in this time frame than was created by mining.
The cornerstones for the introduction of deflation laid hard-fork London introduction of a combustion mechanism. More than $ 3 billion worth of Ethereum has been burned since its inception, and data from Ultrasound Money shows that about 15,000 ETH is burned daily, so at current prices, we’re talking about $ 60 million. Analytical data from WatchTheBurn then show that the difference between the rate of combustion and net emissions was (at the time of writing) minus 8,000 ETH for the last seven days.
Gas prices may also play a role in the current trend for this asset. In recent weeks, its price has risen drastically to the point that average network transaction costs have exceeded $ 50.
“Due to the current PoW emission (4.5%), deflationary ETH was not expected”
– said Anthony Sassano, co-founder of EthHub on The Daily Gwei. The transition to ETH 2.0 is planned for 2022, but even so, according to him, it is a rare look into the future of this asset.
Ethereum thus continued its impressive performance in October, when it rose sharply to a new all-time high of $ 4,638. Market capitalization the second largest cryptocurrency is $ 536 billion, while the 24-hour transaction volume increased 23.08% to $ 18 billion (data at the time of writing).
Future
When Ethereum 2.0 becomes a reality, it will bring more than just deflationary pressure. Analyst company Ultrasound predicts that Etherea’s offer may decline by up to 2% per year once the transition is complete.
At the moment, Ethereum has not set a total number of coins and its circulating offer is at the level of 118 187 792 ETH. (In contrast, BTC has a total number of coins set at 21,000,000 in its code).
Preparations are currently underway to achieve this Ethereum 2.0 in full swing. The Altair upgrade has been successfully launched and the level of optimism for a smooth transition in the development team in Greece is rising.
Conclusion
Ethereum 2.0 also means the transition from Proof-of-Work to Proof-of-Stake, which will significantly reduce the level of network power consumption. It is generally expected that gas charges will be significantly reduced for a number of functions that will come into the network.
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