Ethereum enters “deflationary season”, futures bulls are optimistic about the market outlook
The EIP-1559 proposal introduced in the Ethereum London hard fork has become more and more effective. According to data from ultrasound.money, as of November 1, the amount of ETH burned has exceeded 700,000, worth about $3.06 billion.
Calculated based on this burning progress, ETH can burn 3 million ETH a year, which is more than half of the current annual increase of 5.4 million, reducing its annual inflation rate from 4% to 2.1 percent.
What is striking is that due to the recent ecological activity on the Ethereum chain, between October 27 and 31, the amount of ETH burned exceeded the issuance for consecutive days, and its actual supply decreased by 8571.24 in 4 days. This means that its issuance of tokens has temporarily changed from inflation to deflation.
ETH entered the “deflationary season” and hit a ATH of $4,460 during this period. So far, ETH has once again created a new ATH of $4,669.2. And when the network on the chain is developing and prospering, the Layer 2 ecology is also developing rapidly this year. According to data from L2BEAT, as of October 31, the total amount of Ethereum Layer 2 locked up was 4.68 billion U.S. dollars, an increase of 532.43% from the $740 million two months ago.
The amount of ETH burned exceeds 700,000, which is higher than the issuance for 4 consecutive days
Since EIP-1559 took effect on August 5th, a certain amount of ETH will be burned for every transaction generated on the Ethereum chain. After nearly 3 months of accumulation, as of November 1, the amount of ETH burned has exceeded 700,000 pieces, reaching 712,400 pieces, valued at approximately US$3.06 billion.
The huge amount of burns benefited from the active application ecology on the Ethereum chain. According to data from ultrasound.money, during the current on-chain boom, about 5.63 ETH is burned every 1 minute, worth about $24,200. Up to now, the most ETH burned application is OpenSea, which burns over 91,800 ETH, the second is Ethereum on-chain transfer, which burns a total of 66,000 ETH, and the third is Uniswap V2. A total of 53,000 ETHs were destroyed. There are also Tether, Metamask, Axie Infinity and so on.
According to data from OKLink , on October 28, the amount of ETH burned reached 16,910.57, a record high in a single day; the next day, the amount of ETH burned was also considerable, reaching 16,362.65, the second highest in history.
From October 27th to 31st, the amount of ETH burned exceeded the issuance for consecutive days, and the actual supply in 4 days decreased by 8,571.24 altogether, which means that its issuance of tokens temporarily changed from inflation to deflation.Similar situations have appeared many times. On September 3, the amount of ETH burned exceeded the issuance for the first time, and from September 7 to 9, ETH also entered a state of deflation. It is not difficult to see that with the development of the ecology, phased deflation of Ethereum has become the norm.
L2 lock-up volume increased greatly, and institutions increased long positions
ETH has entered a “deflationary season”, which provides an upward impetus to its market value growth. Some traders believe that as long as the Ethereum ecosystem continues to develop, its token burning speed will increase day by day. The combination of two factors will give ETH Higher growth potential.
ETH is still the king of public chains. On November 1, the total lock-up value (TVL) of each DeFi protocol on the ETH chain was US$136.94 billion, which was at the normalized high point of “All Time High”, occupying 86.67% of the total lock-up value of all mainstream public chains in the market.
After preliminary exploration, the Ethereum L2 ecosystem has developed rapidly this year. According to data from L2BEAT, as of October 31, the total amount of Ethereum Layer 2 locked up was 4.68 billion U.S. dollars, an increase of 532.43% from the 740 million U.S. dollars two months ago.
Ethereum’s first-level network and L2 go hand in hand, and with the advent of the “deflationary season”, the market is raising expectations for it.
By NHASH
________________________________________________________________
Follow us for latest news:
Website: https://www.nhash.net
Twitter: https://twitter.com/NHASH_mining
Facebook: https://www.facebook.com/NHASHmining
