InstaForex

November 2, 2021

Transaction Cost Spike Invites Deflation Week In Ethereum

 Ethereum saw the first week of negative supply in a row due to the bubbling of cryptocurrency markets to extraordinary levels, causing transaction costs to rise as well.


After the London update in August, a number of Ethers were burned in every transaction carried out on the network.


Recorded over 724,400 ETHs worth $ 3.1 billion have been eliminated.


Based on observations, gas prices remain at record highs, $ 46 and complex activities such as providing liquidity to the DeFi protocol or making token exchanges at Uniswap cost up to $ 140 at the time this article was written.



No wonder why the Ethereum network recorded deflation for 7 consecutive days.


This means that a large amount of ETH has been removed from supply compared to the amount of coin production through crypto mining.


For the record, to ensure Ethereum produces a continuous block of deflation, gas prices should be kept at an average above 150 gwei.


According to EthHub co -founder Anthony Sassano, Ethereum’s deflation was something unexpected until the merger of the Ethereum blockchain with Ethereum 2.0 (Beacon Chain) scheduled for the first half of 2022.