It’s been just reported that the daily supply of Ethereum is under heavy pressure as the platform burns thousands of ETH on a daily basis.
Etherchain is an Ethereum on-chain monitoring tool and this shows that the second-largest crypto asset is now torching 4.23 ETH per minute, which equates to 6,091.2 ETH burned per day, worth over $19 million at the time of writing.
As the Daily Hodl also notes, Etherchain indicates that the network “has burned a total of 54,482 ETH, worth over $172 million, since Ethereum launched the London hard fork on August 5th.”
Burning mechanism has an important impact on ETH’s daily supply
Crypto analytics firm Glassnode says the burning mechanism has a significant impact on ETH’s daily supply.
“As on-chain activity increases, more transaction fees are paid by users, and thus more ETH is burned. This mechanism, therefore, acts to translate economic activity on the Ethereum blockchain into scarcity for the ETH token,” according to the notes.
These continue and say that “Since the launch of EIP-1559, the average burn/block has been about 0.71 ETH/block. This means the effective issuance rate of ETH supply has slowed by 36%.”
Glassnode also said that “In the extreme cases of high demand for block-space, net ETH issuance can indeed become net deflationary, where more ETH is burned than is issued.”
The same notes continue and reveal that “It is noted that under the current Proof-of-Work issuance schedule, such a level of deflation would require network usage significantly higher than that expressed today.”
Regarding the price of Ethereum, at the moment of writing this article, ETH is trading in the red and the digital asset is priced at $3,158.82.
Ethereum’s Vitalik Buterin shared an interesting tweet about decentralized governance. Check it out below.
Decentralized governance is necessary, but coin voting governance in its current form has many acknowledged and unacknowledged dangers. Augmenting or moving beyond coin voting is a key part of the solution:https://t.co/pZQ4sLAbEy
— vitalik.eth (@VitalikButerin) August 16, 2021
Stay tuned for more news.