Over 700,000 ETH burned; Merge may take Ethereum ‘toward deflation’
Ethereum 2.0 Altair Beacon Chain update had a successful start, with 98.7% of the nodes upgraded at the time. This marked an important step towards the Merge, the transition to a proof-of-stake consensus mechanism.
Since July, Ethereum also underwent important upgrades, such as the London hard fork. This update incorporated a deflationary burning mechanism to the asset as part of the network’s fee structure.
Fast forward to now, ETH and its burning mechanism have come a long way amidst the latest update. According to Etherchain, Ethereum burned 10.06 ETH worth $42,895 every minute over the last 24 hours. Overall, it torched around 701,630 ETH, equivalent to $3 billion (approx.), at the time of writing.
Other similar platforms have showcased the same narrative. For instance, Ultrasound.money, an ETH supply-tracking site inferred the following insights. The Non-fungible token (NFT) marketplace OpenSea is responsible for burning the most ETH, torching 91,172 ETH worth over $398 million at the time of writing. Here’s the list of others:
The decentralized exchange (DEX) Uniswap (version 2) with a total of 51,331 ETH worth over $230 million falls in this category as well. Ergo, NFT and DeFi are currently two main use cases of Ethereum.
Now, needless to say, the sheer amount mentioned above amounts to billions of dollars. For instance, Chinese journalist Wu Blockchain tweeted as follows:
According to oklink, the amount of ETH burned on October 31st reached 697,591, which is more than 3 billion U.S. dollars, and is currently 3.051b.
— Wu Blockchain (@WuBlockchain) October 31, 2021
“Ethereum’s current burn rate is around 5 ETH/min, and the average burning value of a single block remains above 1.1 ETH. The annual new supply of Ethereum is 5 million, which means that at the current burn rate, more than 50% of the new supply is burned. If ETH1.0 and ETH2.0 are successfully merged, Ethereum may move toward deflation.”
A couple of other parameters have impacted Ethereum’s achievements in recent times. Apart from the points mentioned above, institutional adoption played a crucial role.
Consider this, 12 Ethereum securities products held a total of 1.4294 million ETH, valued at more than $5 billion, or accounting for 1.23% of the Ethereum market cap, the report noted. CoinShares Ether Tracker Euro, an Ethereum securities product under CoinShares, held nearly 380,000 ETH, ranking first in the Ethereum securities products.
Moreover, pro-ETH analysts have maintained their bullish viewpoints regardless of certain consolidation periods. Now or in the past.
On verge of price discovery
Next leg up should be one of the wildest yet
— Pentoshi Won’t Dm You. hates Dm’s. DM's are scams (@Pentosh1) October 28, 2021