The Ethereum network has seen its first week in a row of negative offersas bubbling markets cause persistently high transaction fees.
With the long-awaited London update that introduced a burning mechanism for the Ethereum fee market in early August, a small amount of Ether (ETH) has since been destroyed with every transaction made on the network.
With gas prices staying high, Ethereum has posted deflationary emissions for the network for seven consecutive days, meaning more ETH has been taken off the shelf than has been created by mining. In order for Ethereum to be able to consistently reduce deflationary blocks, gas prices must constantly stay above 150 gwei.
EthHub Co-Founder, Anthony Sassano, commented that a deflationary Ethereum was only expected “at the merger” when the Ethereum blockchain merged with the Ethereum 2.0 beacon chain.which is currently expected to take place in the first half of 2022.
According to the Ultrasound.Money Rate Burning Tracker, Around 15,000 ETH are burned every day (65 million USD at current prices). If you take into account the creation rate of new ETH tokens, Watch the Burn reports a net weekly issue of minus 8,034 ETH (approx. 34 million US dollars). at the time of this writing.
Since the London upgrade, more than 724,400 ETH have been permanently destroyed valued at $ 3,100 million.
According to Etherscan, the average cost of an ERC-20 token transfer is now a painful $ 46. Doing something more complex, like providing liquidity for a decentralized financial protocol or doing a token exchange on Uniswap, can cost up to $ 140 right now.
Sassano highlighted that the update did not increase gas prices, but made it more predictable. “Contrary to popular belief, EIP-1559 did not raise gas prices and in fact helped significantly with peaks in demand (like exaggerated NFT mints) which has resulted in an overall smoother network, “he said.
According to the Bankless Ethereum Network’s Q3 report the value of transactions completed between July and September this year was $ 536.5 billion, an increase of nearly 400% from the same period last year.
Despite Ethereum’s first week of deflation many Ether proponents are trying to encourage users to migrate to transactions by using their burgeoning Layer 2 ecosystem.
According to L2beat, There is a record $ 4.68 billion in Total Value Locked (TVL) across various Layer 2 networks. This TVL has increased nearly 500% in the past two monthsas Ethereum users increasingly look for ways to avoid such excruciating transaction fees.