Ethereum: Supply Significantly Reduced in 2023, Asset Becomes Deflationary
According to market intelligence platform IntoTheBlock's publication on March 18, the world of cryptocurrency has seen significant development as the supply of Ethereum has been reduced by 66,000 ETH in 2023.
This change results from Ethereum’s transition to a Proof-of-Stake (PoS) consensus mechanism, known as the ‘Merge,’ which occurred in September 2022.
The new mechanism burns a portion of ETH transaction fees, resulting in a deflationary Ethereum.
For those unfamiliar with the term, deflationary currency refers to a type of currency whose supply decreases over time, unlike inflationary currencies, where the supply of currency increases over time.
This feature makes deflationary currencies particularly appealing to crypto enthusiasts seeking scarce digital assets, as they believe scarcity can drive up an asset’s value.
Additionally, the Shanghai-Capella upgrade, also known as the Shapella upgrade, is scheduled to go live on April 12, 2023.
This is a crucial feature that was left out during Ethereum’s shift to PoS consensus in September last year, following the Merge upgrade.
At the time of writing, ETH is trading around $1,817, with a solid 26% growth registered in the last seven days.