The net issuance of Ethereum has increased significantly to reach +0.07%
EIP-1559 base fee burning mechanism has burned over 2.72 million ETH that accounts for 4 ETH burned every single minute since its inception
There would be close to no effect on the prices of Ethereum because of an increase in the supply growth
Significantly to reach +0.07% after going below zero right after the FTX fall on 12th November 2022.
According to the on-chain data from the ultrasound.money the total ETH supply outpaces the burning by 0.13% annually. This was a break from the defamatory streak of ETH, contradicting the expectations of ETH going on to be a defamatory asset after the merge.
According to Ethereum’s smart contract, it is burning all of its base fees to reduce the total supply in the long run and cope with its minting rate. The recent market conditions and the FTX fiasco has forced both centralized and decentralized users to move their assets to safer investment options, causing a massive move of crypto assets on the blockchain networks.
The higher the congestion on the network, the higher would be the base fees and as per the Ethereum Improvement Proposal (EIP)-1559, the blockchain is burning all of its base fees. This has led the ETH to burn tokens at a higher rate than that of its minting. This was the first time happening for PoS ETH, making headlines over the internet as a success for the blockchain network, however, the present uptrends in the total ETH supply indicate that the drop was rather shortlived and incited by the mass movement of crypto assets. ETH burned over 5000 ETH in a single day after the FTX crashed all of the sudden. This mass burning of ETH caused the supply growth to go negative.
EIP-1559 base fee burning mechanism has burned over 2.72 million ETH which accounts for 4 ETH burned every single minute since its inception. The burn rate hovers around 1 ETH being burned every single minute.
With time, Ethereum’s value is going to increase as Vitalik wants Ethereum to stay deflationary long enough to affect its prices directly. Even though the mentioned data affects the overall market sentiment, there would almost be no effect on the prices of Ethereum because of an increase in supply growth.
Also, Read - ETHEREUM PRICE ANALYSIS CMP-$1,260: Is it a mystery? Higher Prices Are Rejected by ETH
