In early August, the Ethereum network launched the London Hard Fork upgrade. This upgrade was aimed at making the Ethereum network have a deflationary supply model. Moreover, it is among the proposals that were laid out to help Ethereum reach the Eth2.0 upgrade.
Over the past three months, the ETH hard fork has been burning tokens from the network. However, in the past week, the network has burned more Ethereum than what was generated.
First Deflationary Week
Data from Watch the Burn found that more than 100,000 Ether tokens were burned during the past week. During the same week, 93,000 Ether tokens were generated, showing that the network recorded a net-negative issuance of 8600, worth around $37 million.
Early September, a month after the hard fork upgrade was implemented, the network recorded its first daily net-negative issuance. A month after the upgrade was launched, more than $1 billion worth of Ether tokens were burned. These ETH tokens would have previously been used to pay network miners, who have since transitioned to receiving optional tips from network users.
However, miners are not earning as much as they used to. The funds they are getting with these rewards are much lower than what they received previously. In the past week, miners received total tips of lower than 14000 ETH.
The reduction of the mining rewards was heavily opposed by ETH miners when the London Hard Fork was launched. The largest Ethereum mining pool, Sparkpool, was among the miners that opposed the EIP 1559 upgrade.
Ethereum Outdoing the Competition
Data from Watch the Burn contains the net-reduction percentage details to indicate the total number of ETH Tokens burned since this fork was introduced. Over the past week, the percentage has increased to more than 100%, showing that the number of burned ETH is higher than minted ETH.
Analysts had stated that this data reveals that ETH is living up to its nickname of being “ultra-sound money.” when the Ethereum hard fork was introduced, many ETH supporters stated that it would be the ultra-sound money because it had features that were superior compared to Bitcoin.
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