A large increase in the amount of activity on the Ethereum network has coincided with a continuous decrease in the total supply of Ethereum. From the beginning of January, the second-largest cryptocurrency in terms of market cap has become a deflationary asset as a result of a recent upgrade that goes by the name EIP-1559.
Since the upgrade, when an ETH transaction is issued, a part of the transaction fee is removed completely from the circulating supply of Ethereum. This indicates that the asset’s value could potentially increase when the Ethereum network experiences higher levels of interest, acceptance, and trading activity.
As a consequence of this, Ultrasound.Money has observed that the overall supply of ETH has begun to decrease rather than increase so far in 2023. Since the Merge, which took place 157 days ago, a total of 28,730 ETH with a value of $48,885,818 has been burned.
Additional $25 Billion in ETH to be Released Soon
An important new upgrade for Ethereum, known as the Shanghai upgrade, is about to be released in the near future. It is anticipated that the update will take place the following month, at which point a total of $25 billion worth of ETH that has been locked in initial staking contracts will be released.
After the Shanghai upgrade is complete, the developers working on Ethereum will turn their attention to additional features for the network. These new features include sharding and zero-knowledge proofs. Sharding will, in essence, make it possible for the network to carry out parallel processing.
This update will significantly improve the scalability of the Ethereum blockchain. On the other hand, users are able to authorize transactions using zero-knowledge proofs, which are supposed to provide more privacy by preventing the disclosure of any personally identifiable information.