Ethereum marching towards becoming 🦇🔊
With lots of ETH being burned and staked, it’s clear that the market is setting up for a large supply squeeze.
Ethereum blockchain has burned more than $1B in ETH, EIP-1559 upgrade was pushed on the network was an Ethereum Improvement Proposal that changes how fees are paid to miners & how ETH is issued. It works by standardizing fee payments using a base fee calculated on a network demand-basis to be burned. So if the network is under heavy usage, more ether will be burnt.
It was expected to bring down ETH supply and in effect increasing the value of the ETH token. This has been working well as more than 300K ETH has been burned so far.
On Sep3, the net emission turned negative, making it the first deflationary day for ethereum network. More ETH was burned than the ETH being issued to miners. This can happen as the base fee adjusts upward during periods of higher demand for Ethereum transactions. This could be attributed to congestion on the network due to NFT minting which increases the base fee upwards.
Ultra sound money
“ultra sound money” is used as a meme to explain what the Ethereum network is going to become when it turns to proof-of-stake. The ultra sound money meme serves to mock Bitcoiners who describe BTC as a “sound” money asset, meaning that it's not won't have sudden depreciation in its value.
However, the ultra sound meme and its implied deflationary proposal seem to have some kind of validity: the price of ether has skyrocketed this last month to reach ATH levels of $4,100, and experts conclude that it is likely to keep growing.
So, what’s next for Ethereum ?
ETH being burned and lots of ETH is being staked in Eth 2.0 contract is causing change in supply inflow, this is an indication that supply of coins is really starting to dry up, This supply squeeze on exchanges is extremely bullish for ethereum.
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