Burning $3.6 billion worth of Ethereum…what will happen after the merger upgrade?
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Answer Burning $3.6 billion worth of Ethereum…what will happen after the merger upgrade?
Since the announcement of the launch of the EIP-1559 protocol, billions of ETH have been removed from the market, partially helping the price of Ethereum, as the massive sale no longer hits the market.
The amount of Ethereum burning exceeded 2.6 million ETH, or about $3.7 billion at the current price.
If we measure the amount burned by calculating the Ethereum price peak, the value will be higher, as the value of Ethereum burned is about $12 billion.
More importantly, the annual inflation rate of Ethereum has fallen by more than 50% which has pushed Ethereum to become a deflationary asset, which means that the issuance of the coin will fall below the burn rate.Read:Poll: One in six Australians own cryptocurrency
With the integration update, the total Ethereum issuance will drop by 90%, driving network inflation to a very low level.
As issuance decreases and adoption grows, the demand for Ethereum will drive the price of the asset more effectively.
It is clear that reducing the supply cannot and will not be the only fuel for the price of Ethereum.
Decentralized applications and solutions are the main sources of the incremental value of Ethereum, which means that deflation without use cases will not change the value of Ethereum.
As we can now see, the influx of funds from the cryptocurrency market and the blockchain industry in general caused the Ethereum price correction of almost 80%.
The massive correction was linked to outflows from the DeFi and NFT industries, the main sources of revenue for the Ethereum network.
Extremely low network fees are proof that the network is not being used.
The situation is expected to change with the gradual recovery of the digital asset market, which will not happen until monetary policies around the world recede.Read:Bitcoin rebounds to the $20,000 level and Ethereum is back to the $1,000 level
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