In a landmark move for the world of cryptocurrency, the supply of Ethereum has been reduced by 66,000 ETH in 2023, according to the information shared by market intelligence platform IntoTheBlock published on March 18.
This comes as a result of Ethereum’s ‘Merge‘ transition to proof-of-stake (PoS) consensus that took place in September 2022. With the new consensus mechanism, a fraction of ETH transaction fees is being burnt. This made Ethereum deflationary.
In 2023, the supply of Ethereum reduced by 66k $ETH due to burning a fraction of transaction fees. This move has made Ethereum deflationary, which is great news for crypto enthusiasts seeking scarce digital assets. #Ethereum #deflation pic.twitter.com/2RuwiioffW
— IntoTheBlock (@intotheblock) March 18, 2023
For those who are not familiar with the term, a deflationary currency is one where the supply of currency decreases over time. This is in contrast to inflationary currencies, which see the supply of currency increase over time.
Notably, deflationary currencies are particularly attractive to crypto enthusiasts who are seeking scarce digital assets, as they believe that scarcity can drive up the value of an asset.
April’s Shanghai upgrade
It is worth mentioning that another highly anticipated Shanghai-Capella upgrade, also known as the Shapella upgrade is scheduled to go live on April 12, 2023.
The most notable aspect of 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 proof-of-stake (PoS) consensus in September last year, following the Merge upgrade.
As of the time of writing, the ETH price is hovering around $1,816.52 per coin. The asset’s price registered solid growth in the last 7 days, rising by 26%.