Reduced Ethereum Burnt Volume: What are the Causes and Consequences?
Date: 2024-05-06 Author: Henry Casey Categories: BUSINESS
May 5, 2024 was the day when the daily volume of Ethereum burned reached a new all-time low, falling to 610.52 ETH, according to Etherscan data. This phenomenon has generated widespread interest and raised questions about the causes and consequences of this phenomenon.
Downward Trend
The Ethereum burn chart shows a consistent decline that especially intensified in early March 2024. This has caused alarm in the community and brought attention to the factors influencing this trend.
Impact of Technological Updates
One of the main reasons for this decline could be the implementation of the Dencun update in March 2024. This update may have led to a reduction in network fees, which in turn affected the amount of Ethereum burned.
Correlation with Commissions
It is interesting to note that the amount of Ethereum burned is closely related to changes in the average network fee. On the same day, May 5, 2024, the average fee dropped to $2.32, according to BitInfoCharts. This may indicate a relationship between fees and the amount of Ethereum burned.
Deflationary Properties of Ethereum
Since the implementation of the base fee burning mechanism with the London hard fork in 2021, a significant amount of ETH has been destroyed. However, after the update of The Merge, Ethereum began to have deflationary properties, which means negative dynamics of changes in its supply.
The decrease in the volume of Ethereum burned to a new historical low on May 5, 2024 is a significant event that requires careful analysis and understanding. The introduction of technological upgrades, changes in fees and the deflationary properties of the network are all factors influencing this trend and require further study.
