Since the update of how transactions work on the Ethereum blockchain one month ago already 212,114.64 ETH were burned forever. EIP-1559 changed the network forever and is a great step towards Ethereum 2.0. However, due to expanding network usage and continuous NFT hype, Ethereum is heating up. This means gas prices sometimes skyrocket resulting in higher base fees hence a higher burning rate.
As you can see in the chart, a few days ago we had the first whole deflationary day on Ethereum ever! This means more Ether was burned than mined all over the day. This confirms that Ethereum is ultrasound money. If you're not familiar with the terms "sound money" and "ultrasound money" I will explain it to you now.
What's sound & ultrasound money?
As you can see Gold and Bitcoin is called sound money. This means the supply isn't increasing at all but isn't decreasing as well. Different to fiat money, like the US Dollar, Bitcoin and Gold has a capped supply. It's scarce. If demand rises and supply is always the same, the price will go up. Ethereum is currently inflationary, but as said earlier, we had the first deflationary day ever for Ethereum. This means Ethereum has a decreasing supply - it's ultrasound money. If demand rises and supply decreases, the price will skyrocket up. With Ethereum 2.0 the reward for miners of 2 Ether/Block will be removed while staking is implemented. With this update roughly 0.4M Ether will be produced per year with staking rewards, while under Proof of Stake, right now, 5.4M Ether are mined every year. It's estimated that 2.4M Ether are burnt per year, so under PoW is inflationary with a supply of +2.4% per year. With PoS this changes to -1.8% at current rates, means Ether is deflationary. Those numbers are taken from
if you have any questions, feel free to ask me, regards ntz
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