Ethereum Supply Reaches Lowest Level Since the Merge
According to data from Ultrasoundmoney.com, the supply of Ethereum ($ETH) has decreased by 47,272 tokens in the past 30 days. As of December 2023, the Ethereum supply has reached 120,211,639 – the lowest since the Merge.
A Big Shift is Here
The Merge marked one of the biggest updates for the Ethereum network as it transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This shift eliminated mining and introduced staking coins to validate transactions. Consequently, Ethereum’s energy consumption has decreased by 99.98%, resulting in a 99.99% reduction in its carbon footprint.
Under PoS, the overall supply of ETH has decreased over time thanks to the implementation of EIP-1559. This mechanism burns transaction fees, leading to a deflationary effect on the ETH supply. It benefits the network’s long-term sustainability.
Following the collapse of FTX and increased distrust in centralized exchanges, there has been an increase in burned ETH on decentralized exchanges like Uniswap. This trend aligns with the growth of activity on NFT marketplace Blur.
Will Ethereum Reach $3,000 in 2023?
Ethereum experienced a rally in November but has been on a downward trajectory since then. However, 2024 holds promise for the Ethereum network with its upcoming major upgrade, Ethereum Cancun-Deneb. This upgrade aims to reduce transaction fees on Layer-2 protocols and improve data availability within the network.
The success of this upgrade can boost adoption and increase network usage and activity. Technical upgrades and improvements often lead to positive market sentiment and a favorable price trend for Ethereum. The price trends for 2024 are bullish, and it’s only a matter of time until we see more record high prices.
Hot Take: Ethereum’s Supply Decreases Significantly as Network Adopts PoS
The supply of Ethereum has reached its lowest level since the Merge as the network transitions to Proof-of-Stake (PoS) and eliminates mining. This shift has also resulted in a significant reduction in energy consumption and carbon footprint. The implementation of EIP-1559 has further contributed to the decrease in ETH supply by introducing a burning mechanism for transaction fees.
The collapse of centralized exchanges like FTX has led to an increase in burned ETH on decentralized platforms. Additionally, the growth of activity on NFT marketplace Blur indicates a resurgence in the Ethereum network’s usage.
Looking ahead, the Ethereum Cancun-Deneb upgrade in 2024 holds potential for reducing transaction fees and improving data availability. These improvements can attract more users and developers to build on Layer-2 protocols, ultimately driving network adoption and potentially leading to higher prices for Ethereum.
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