Ethereum has been facing a niska naknada issue for the past few months, as with the decreasing popularity of the DeFi and NFT industries, the network’s usage fell to an extreme low. That caused another problem that investors thought they would never face after the EIP1559 izvršenje.
According to Glassnode data, gas prices for Ethereum are currently at the level of May 2020, when the price of the second biggest cryptocurrency was around $200. With the fees on the network reaching unacceptable values, the amount of ETH burned by EIP1559 reaches an all-time low as only 11% of issued coins are being removed from circulation.
Cijene plina za #Ethereum su na višegodišnjem minimumu, sada se vraćaju na nivoe iz maja 2020.
Kao rezultat, $ ETH spaljeno od EIP1559 je na najnižem nivou za sve vrijeme, sa samo 11% iskovanih izdanja spaljeno.
Ovo je najinflatorniji ETH od kada je EIP1559 objavljen. pic.twitter.com/Jjzw3nJcN8
— _Checkɱate ?⚡?? (@_Checkmatey_) Juli 31, 2022
Considering a relatively high issuance, Ethereum became most inflationary since the implementation of the coin burning mechanism that should have made Ethereum deflationary. Prior to the Merge update, investors expect Ether’s supply to keep on increasing since the network’s usage seems to remain at a low level.
Lacking effect of deflation
Despite the decreasing supply, Ether’s value does not seem to be increasing during a bear market. We saw the accumulated growth back when both the DeFi and NFT industries were blossoming, which confirms that supply burning only has a collateral effect.
Previously, numerous Ethereum enthusiasts were betting on deflation as one of the main price drivers on the market. This was premised on the fact that investors will start selling less and provide more pressure on the existing snabdijevanje.
With increasing demand for the coin in the future, investors expected Ether to enter a “deflation rally” and show yet unseen returns on the market. Unfortunately, the lack of demand for crypto has had a more significant effect on the price of ETH than deflation.
Source: https://u.today/ethereum-inflation-reaches-dangerous-levels-as-eip1559-no-longer-effective