Ethereum is on a Roll and Entered Deflationary Levels: Report
According to research (1) conducted by ultra sound money, the issue of Ethereum (ETH) has once again entered a deflationary condition for the first occasion since December 2022.
At the time of this writing, the growth of the crypto currency's supply was at -26.19 ETH, while the yearly inflation rate for the altcoin had plummeted to -0.00002%.
If the pace at which new ETH is being introduced to the overall supply of ETH begins to slow down, then we are seeing deflation in the ETH market. To put it another way, since the beginning of the year, the most prominent smart contract blockchain has destroyed a greater number of ETH tokens than it has created new ones.
According to the findings of Etherscan, the amount of ETH that is burnt, each day has increased by 32% since the start of the year.
Ethereum on a Roll
After a turbulent end to the trading year in 2022, the overall crypto currency market has been growing since the beginning of this year, which is reflected in the strong increase in the value of Ethereum (ETH). The total market value of crypto currencies throughout the globe has increased by 31% in the previous 16 days, according to statistics provided by tradingview.com.
Additionally, since the beginning of the year, the transaction records settlement on Ethereum have topped $21 billion, placing it in a large lead above Bitcoin's daily transactions of $2.6 billion.
Ethereum settling over $21b a day in value while Bitcoin struggles to settle over $2.6b in value...
— Crypto Maxi (@cryptoMaxi420) January 15, 2023
You tell me where the future lies pic.twitter.com/Ez0kcinM1W
In addition, CryptoQuant researcher CryptoOnchain discovered (2) that there had been an uptick in the production of brand-new ETH smart contracts. The number of newly created smart contracts on the Ethereum network is said to have increased during the past four months, following a downward trend between August 2021 and October 2022, as reported by CryptoOnchain.
It is possible to interpret a significant increase in the number of newly created smart contracts on Ethereum as evidence of robust dev engagement and enthusiasm in the platform. This would suggest that the Ethereum ecology is both robust and expanding.
This is an encouraging indication for the future of Ethereum since it implies that an increasing number of developers are building on top of the Ethereum blockchain, which in turn suggests that the ecosystem is becoming more resilient and functional.
Shanghai Upgrade on the Cards
A closer inspection of the Ethereum 2.0 contract found increased on-chain activity ahead of the Shanghai Upgrade, which is anticipated to occur before the end of the first quarter of 2023.
Glassnode reported 513,414 ether coins stored in the Ethereum 2.0 deposit contract. This information was obtained from the blockchain. Since the beginning of the year, this has seen a 1.3% increase.
At the time of this article's publication, the overall number of validators on the proof-of-stake system was 501,666. This represents an increase of 1.2% over the previous 16 days.