The Ethereum network has just experienced its first consecutive week of negative supply issuance as bubbling markets continue to deal with increased transaction fees.
Following the London upgrade in August, that introduced a burning mechanism, a small quantity of ETH has been destroyed each time a transaction took place.
But with gas prices continuing to remain high, ETH has experienced seven consecutive days of deflationary issuance for the network, which means that more ETH has been destroyed than was created. For Ethereum to be able to produce deflationary blocks consistently, gas prices need to stay above 150 gwei.
Anthony Sassano, the co-founder of EthHub, said that deflationary Ethereum wasn’t expected until “the merge” which is expected to take place in Q1 or Q2 2022.
Ethereum Burning Records
About 15,000 ETH ($65 million) is burned every day. When the rate of new ETH being created is taken into consideration, the weekly net issuance is of minus 8,034 ETH ($34 million).
Following the London upgrade, over 724,400 ETH ($3.1 billion) has been eliminated.
It seems that the average cost of an ERC-20 token transfer has now reached $46. More complex activities, like offering liquidity to a decentralized finance protocol or making a token swap on Uniswap can cost $140.
Sassano highlighted the fact that the London upgrade hasn’t actually increased gas prices, but it has made them predictable:
Transaction value settled for July to September of this year has reached $536.5 billion, which represents an increase of around 400% compared to the same period of 2020.
Source: CoinTelegraph.com