Data from ultrasound.money shows that Ethereum has experienced monthly total deflation for the first time. In the past 30 days, the total amount of ETH has continued to decline, with a cumulative decrease of 56955.01 pieces, worth about $88.98 million. In addition, the daily average, seven-day average, and 30-day average ETH supply were all negative, which caused ETH to officially enter the deflation stage. After 41 days since the completion of the ETH merger, the cumulative gain is only 1330.46ETH, which is 80.4% of the daily issuance of 1654.06 ETH.
Since EIP-1559 was effective on August 5, 2021, every transaction on the Ethereum chain has destroyed a certain amount of ETH. According to ultrasound data, ETH burned 2,066.29 ETH yesterday, exceeding the daily issuance of 1,654.06 ETH. If this burning progress continues, ETH can burn 768,000 pieces per year, 24.88% of the current annual increase of 615,000 pieces, with a current annual deflation rate of about 0.1%.
As of October 27, 2022, according to Dune data, it can be seen that the cumulative destruction of ETH has exceeded 2,691,277.27 pieces, worth about $4.2 billion. The EIP-1559 proposal introduced in the Ethereum London upgrade has gradually become more effective.
The huge amount of destruction benefits from the active application ecology on the Ethereum chain. According to the latest data of ultrasound.money, the most ETH destroyed is on the transfer process on Ethereum chain, with a total of 245,625.09 ETHs destroyed. The second is OpenSea, which has destroyed a total of 230,050.14 ETHs; the third is Uniswap V2, with a total of 140,430.63 ETHs destroyed. Followed by Tether, Uniswap V3, Otherdeed, Metamask, and more.
It is not difficult to see from the ETH burns ranking that the hotspots of Ethereum ecosystem in the past few months have mainly focused on transactions, NFTs, DeFi, and stablecoins.
While the ETH ecosystem is prospering and developing, the Layer 2 ecosystem is also growing rapidly. According to the data from L2BEAT, as of October 27, the total hedging of Ethereum Layer 2 was $5.09 billion.
Currently, Arbitrum One has the highest hedging volume expansion plan, with a TVL of about $2.59 billion, accounting for 50.96%; followed by Optimism, with a TVL of $1.58 billion, accounting for 31.18%; dYdX ranked third with a TVL of $378 million, accounting for 7.44%.
A few days ago, XEN Crypto (XEN), a popular multi-chain mining protocol on the entire network, ranked first for ETH burns for several days after its launch, with a cumulative consumption of over 4491.03 ETHs, accounting for about 26.9% of the 7-day total burnt of Ethereum. With the further implementation of the Layer 2 expansion plan and the accelerated growth of TVL, it is expected to bring new growth points to Ethereum. In the future, more and more applications could cause community FOMO, which is expected to help ETH accelerate deflation.
As the ETH ecosystem becomes more prosperous and the upcoming deflation, the market is raising its expectations. According to The Block, Fidelity Digital Assets, an independent subsidiary of financial services firm Fidelity Investments, will begin to offer its institutional clients the service of buying, selling, and transferring ETH starting on October 28. This also fully shows that institutional investors are optimistic about the market outlook of Ethereum.
Since ETH announced its merger on September 15, the price of the secondary market has been falling all the way. After 42 days of consolidation, it finally regained its lost ground. MEXC market data shows that the price of ETH was reported at $1,561.66 on October 27, with a gain of 24.88% after seven days, and the price has returned to its original height.
Previously, some insiders predicted that the market value of ETH would overtake BTC. The current market value of ETH in circulation is $191.396, which is still far from the market value of BTC of $434.875 billion. With the improvement of ETH deflation and the development of Layer 2, more and more people see the future value of the Ethereum network and ecology and start to focus on Ethereum as an investment at the current stage. We shall wait and see whether ETH can break the historical record in the next bull market.
Note: This article is written by MEXC community users for information sharing only and does not constitute any investment advice.
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