Ethereum Is About To Change Again

A hot topic of Ethereum was the introduction of a burn mechanism that would be a steady burn for each block. This burn "fee" would increase if transactions became over saturated and continue to climb until things leveled out thus reducing the fee again. This update was called EIP-1559 and was one of the first moves away from miners. This burn fee is not given to anyone instead it's a check to try and help the system to be better optimized otherwise it will cost developers and applications that use it.

There was a time before the hard fork when Ethereum was deflationary but that time has passed and leading up to the hard fork it was starting to sway the other way. However since that update to proof of work Ethereum has once again become deflationary for the first time!

A Rally Inbound?

With Ethereum being deflationary again along with a number of other factors such as more Ethereum getting locked up for Proof of Stake. You can get a great overview of all of Ethereum and what's causing the burns etc along with supply at https://ultrasound.money/

Proof of stake locked up Ethereum: I haven't been able to find a good location as to how much Ethereum is staked or locked up currently in proof of stake. However the last report before the merge put it at least at 10 million Ethereum. That put's it at around 10% at least currently locked into Proof of stake contracts and I very much so think that's increased since the merge.

DeFi Locked: Per DeFi Llama there's currently over 30 billion invested which would put us at around another 23 million locked up in DeFi.

For the most part Ethereum is still looking rather bearish but it does offer the possibility for a rally. A 30% increase would push us around the $1,600 range which I think is reasonable to expect by the end of this year if things keep pace in terms of the burns and project development.

Censorships 51%

One big negative that's hit Ethereum but can be looked as a positive is 51% of transactions are OFAC-complaint. What that means is that these 51% of transactions on Ethereum follow the U.S Treasury Departments office of Foreign Assets Control. What happens is they post relays and screen out transactions associated with Tornado cash which was banned to Americans. Let's be honest though people still out here gonna use it. This development will be interesting to see what happens next if Ethereum blocks go to 100% or start pushing back.

Posted Using LeoFinance ^Beta