The merger marked the transition of Ethereum to the Proof of Stake consensus algorithm, and one of the more radical changes introduced was related to the ETH supply dynamics.
Since ETH is not mined, its daily entry into the market is drastically reduced by a margin of up to 90%. info from Ultrasound money Helps us keep track of changes.
- As of this writing, a total of 7,525 ETH has entered the market since the merger in the form of a new supply.
- A PoW simulation shows us that this number would have been around 340,000 ETH if the network were still running on the old consensus algorithm.
- However, supply has been shrinking over the past few days rather than expanding, making ETH a contractionary cryptocurrency, albeit temporarily.
- Since October 8, the supply has decreased by about 5,500 ETH. This is due to the EIP-1559 method and the combustion mechanism introduced by it.
- For this reason, a portion of the fee paid (in ETH) is burned with each transaction.
- According to the calculations made by the Ethereum Foundation, it would take about 15 gwei for the price of gas to be a deflationary ETH.
- This has been the case for a few days, and it seems that one of the main reasons was the new project called XEN Crypto.
- as such encrypted potato It was reported earlier this week that it caused a drop in Ethereum network emissions and a spike in gas prices as more than $1.8 million in gas fees were paid for interacting with the token contract.
After the deflation: Ethereum supply drop with 5,500 ETH in five days first appeared on CryptoPotato.