Ethereum moves into negative production
It's been 32 days since Ethereums EIP-1559 London Hard Fork took place and it's proving to be a highly successful business pivot for the token and its broader community.
The tokens price has risen 400% since its all time low in June and continues to surge a head with strong community support. I previously wrote about being concerned about the amount of Ethereum staked in the BETH2 Proof Of Stake protocol due to the fact unstaking will be online early next year. I thought that this may lead to a mass of unstaking and dumping on the market for these new Ethereum prices.
Where this could potentially still be a reality I think Ethereums latest data indicates that it will be more profitable to remain staked.
Ethereum goes negative
On 3 September 2021 Ethereum produced 13,485 but burned 13,838 the first time the token has burned more than it had newly minted. Alot of people were sceptical about if EIP-1559 would produce negative blocks and thought it wouldn't happen. However, this new information now proves that it can be done and it will most likely continue. Thus making Ethereum a deflationary token with an auto burn feature through validating the network.
This will lead to further downward pressure and it's most likely what is leading to the price boom of Ethereum as many investors now see Ethereum as a better investment than bitcoin. Furthermore, it can explain why the market this September is reacting differently than previous years.
As of today the total amount of Ethereum burned since EIP-1559 is 200,000 Ethereum roughly 4.5 Ethereum is burned per minute. That's about $US770 million worth of Ethereum taken out of circulation.
Ethereums mining revenue remained the same through the August period despite transaction fees being lower but this was brought on by the increase in Ethereums price. Should Ethereum begine to decline the mining rewards too will reduce. But at this stage I can not see Ethereum token value declining but rather continuing to rise.
Opensea continues to deliver
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The trading of NFTs and NFT gaming continue to drive Ethereums use case which is slowly moving away from Decentralised Finance to a NFT market place.
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Uniswap once dominated Ethereums fee and most transactions but it had been dislodged by Opensea which now holds top spot. 15% of total fee burns account to transactions on the Opensea network associated with the purchasing of NFTs.
While Bitcoin remains the dominate token it's time in the spot light is definitely limited. With low use cases beyond being a store of wealth referred to as e-gold Ethereum manages to bring a usable product and a store of wealth.
The outcome won't be fully reached until unstaking is available on the BETH2 network and we see how the community reacts to the ability of unstaking and the high market prices of Ethereum.
Will a mass sell off occur or will stakers remain staked? That is the golden question.
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This is great news for ETH holders
It will definitely create a need and a great investment opportunity
Lol how can they confirm if ETH is in negative supply if they don’t have the ability to audit the supply at any one block height?
And with no one able to run a full node you just basing that off a tweet lol Meth-ereum will sell any story these days to sucker in more bag holders
Well this is bad for ETH in my opinion. It's bullish for the price of ETH but bad for the future of the network since gas fees will also go up because of this.
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Great to see Ethereum being propelled to new high and strong positions through its tokenomics and I think moving to Proof of Stake was the right choice at the right time. Even when there will be possible to unstake from the Ethereum 2.0 deposit contract, I don't think there will be a big decline as HODLers will be HODLers and I am one of them! I truly believe in the use cases that Ethereum offers to the financial world and because of that, I foresee a Bitcoin flipping at some point.
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