In the world of cryptocurrency, Ethereum has always been a popular choice for investors and traders alike due to its high market capitalization and strong community support. However, a recent development has made the digital asset even more attractive to those seeking a scarce digital asset.
According to a report by IntoTheBlock, Ethereum has become deflationary due to the burning of transaction fees, resulting in a reduction of 66k ETH in supply in 2023.
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 move has been made possible by Ethereum’s transition to proof-of-stake (PoS) consensus, known as the ‘Merge’ transition, which took place in September 2022. Under the new consensus mechanism, a fraction of the transaction fees generated on the Ethereum network is being burnt, which means that the supply of Ethereum is decreasing over time. This is a significant development for the crypto community, which has been eagerly anticipating the move to PoS, as it is more energy-efficient and sustainable than the previous proof-of-work (PoW) consensus.
The reduction in Ethereum’s supply has been welcomed by crypto enthusiasts, who see the scarcity of digital assets as a key factor in their value. The news has caused a significant shift in the supply held by large Ethereum addresses.
According to Santiment data, addresses holding 10-10K ETH have collectively added 3.61M coins in the past year, while addresses with 10K-10M ETH have collectively dumped 9.43M in the same timeframe.
🐳🦈 #Ethereum‘s large addresses have shifted their supply held substantially. Addresses holding 10-10K $ETH have collectively added 3.61M coins in the past year. Meanwhile, addresses with 10K-10M $ETH have collectively dumped 9.43M in the same timeframe. https://t.co/5iETPLmP36 pic.twitter.com/HdIpuvp602
— Santiment (@santimentfeed) March 16, 2023
This shift in supply held by large Ethereum addresses is an indication of the growing interest in the digital asset, especially with the recent development of Ethereum becoming deflationary. It is also a reflection of the increasing adoption of Ethereum, as more and more investors and traders are seeing the potential of the network and its associated digital asset.
In conclusion, the burning of transaction fees on the Ethereum network has resulted in a significant reduction in the supply of Ethereum, making it even more attractive to those seeking a scarce digital asset. The shift in supply held by large Ethereum addresses is a testament to the growing interest in the network and its associated digital asset, which is expected to continue as Ethereum continues to evolve and grow.
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