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.
READ MORE: Crypto Market Booms Despite Banking Crisis: Bitcoin Leads the Way
The most notable improvement in this upgrade is Ethereum Improvement Proposal (EIP) 4895, which will introduce validator staking withdrawals to the main network.
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.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
