Ethereum’s shift from a deflationary to an inflationary model has witnessed a 0.178% uptick in the last 17 days. During this period, the network added 22,502 ether, valued at $35.31 million, to its total supply.
Ethereum’s Growing Inflation Fueled by Onchain Downturn
Previously, Ethereum maintained a deflationary stance, primarily due to the London hard fork’s EIP-1559 and the notable shift from proof-of-work (PoW) to proof-of-stake (PoS). Yet, the past few months saw a marked decline in onchain activities.
Consequently, the EIP-1559’s fee-burning mechanism has been torching fewer ethers. Just 17 days back, Ethereum’s issuance rate was slightly inflationary, standing at 0.270% annually. But as of now, it hovers around 0.448%, marking a rise of 0.178%.
Fast forward to September 24, 2023, the total ether supply was 120,228,449. Fast track to 11:00 a.m. Eastern Time on October 11, 2023, and this figure has surged to 120,250,951. This increase translates to an addition of 22,502 ether, valued at $35.31 million, reinforcing the amplified inflation rate.
Ethereum’s daily transaction rate has been stagnating, with layer two (L2) platforms chipping away at its activity. Data from bitinfocharts.com on Wednesday reveals that Ethereum’s average transaction fee is 0.0012 ETH or $1.83, a low not seen since December 2022.
Diving deeper, the network’s median transaction fee stands at 0.00046 ETH or $0.726, as per bitinfocharts.com. As of October 11, ultrasound.money indicates a burn rate of 0.57 ETH per minute, with 5,783.55 ETH annihilated in the past week alone.
Ultrasound.money underscores that a staggering 3,633,752 ether has been burned since EIP-1559’s inception 797 days ago, averaging a burn rate of 3.17 ETH per minute. In the last week alone, the supply saw an addition of 10,321 ETH.
However, had PoW remained in play, this figure would have surged to 88,724 ETH within a week, as illustrated by the web portal’s simulated PoW data.
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