Following London Fork, Ethereum Supply Rate Of Change Drops To Nearly Zero
As pointed out by a CryptoQuant , ETH’s supply curve has nearly flattened now as rate of change drops to almost zero. This has made the asset scarce. The Ethereum supply indicator tells us about the total amount of ETH that’s currently in circulation. As miners receive a block reward (in ETH) for mining blocks, this total supply increases with time.The London hard fork exists to tackle this issue. As you know, to complete a transaction on the ETH network, you need to pay gas fees. This fees was originally given to miners. who put these coins back into circulation. But since the London fork, the fees is “burned,” and miners no longer receive it.
Related Reading | Discord Planned To Integrate Ethereum. Huge Backlash Made Them Cancel Everything
Now, what happens is that burning acts as a sort of deflationary measure as it reduces the total supply. Miners still mine ETH, but burning makes up for the amount mined.ETH's supply curve seems to be flattening | Source:
As you can see in the above graph, the rate of change of the Ethereum supply has dropped off to nearly zero following the EIP-1559 launch.
This has lead to a flattening of the total circulating supply. Now, ETH is also becoming a scarce asset, just like Bitcoin. A limited supply can push the price of the crypto up due to demand-supply dynamics.Related Reading | Ethereum Miner Revenue Outpaces Bitcoin In 2021
ETH Price
At the time of writing, Ethereum’s price floats around $4.57k, up 2% in the last seven days. Over the past month, the crypto has gained 30% in value.
The below chart shows the trend in the price of the coin over the last five days.Ethereum's price has crashed in the last few days after setting a new all-time high | Source:
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com