Crypto Analytics Platform Reports Ethereum Supply Dropped By 66,000 ETH

Market intelligence platform, IntoTheBlock, has reported that the world of cryptocurrency has experienced a significant change. In 2023, the supply of Ethereum was reduced by 66,000 ETH, marking a historic milestone.

In 2023, the supply of Ethereum reduced by 66k $ETH due to burning a fraction of transaction fees. This move has made Ethereum deflationary, which is great news for crypto enthusiasts seeking scarce digital assets. #Ethereum #deflation pic.twitter.com/2RuwiioffW

— IntoTheBlock (@intotheblock) March 18, 2023

This development can be attributed to Ethereum’s transition to proof-of-stake (PoS) consensus, known as the ‘Merge,’ which occurred in September 2022. Due to the implementation of the new consensus mechanism, a portion of ETH transaction fees is now being burned, resulting in Ethereum becoming a deflationary currency.

A deflationary currency is characterised by a decrease in the supply of currency over time, leading to an increase in its purchasing power. In contrast, an inflationary currency sees an increase in the supply of currency over time, resulting in a decrease in its purchasing power.

Moreover, deflationary currencies are especially appealing as they are considered to be scarce digital assets. This scarcity is seen as a driver of an asset’s value, making it an attractive investment opportunity for crypto enthusiasts.

It is important to note that another eagerly anticipated upgrade for Ethereum, the Shanghai-Capella upgrade, also referred to as the Shapella upgrade, is expected to launch on April 12, 2023.

One of the significant components of this upgrade is Ethereum Improvement Proposal (EIP) 4895, which will introduce validator staking withdrawals to the main network. This feature was not included during Ethereum’s shift to proof-of-stake (PoS) consensus in September 2022, following the Merge upgrade.

At present, the price of ETH is hovering around $1,816.52 per coin. Over the last seven days, the asset’s value has experienced significant growth, rising by 26%.

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