The end of the quarter was marked by a period of pain for EthereumThe network’s native assets’ so-called “burn rate” sputtered out amid its poorest performance in recent history.
Wintermute’s crypto market maker says the indicator, which monitors the removal of Ethereum from circulation, has hit its lowest levels since August 20, 21. It’s a persistent concern among investors, and it’s “weighed Ethereum’s overall market performance.”
The firm reported that last week around 53 ETH were burned each day. According to, ETH supply is up 3% after an EIP-1559 upgrade. Sound Money.
Since developers embraced ETH, the burn rate has decreased. Layer-2 Scaling Solutions A year ago. Ethereum’s alleged issuance since then has been positive. However, some experts think that institutional adoption could be changing.
Crypto data providers claim that ETH’s market value plummeted by $170 billion during the first three months of 2018. CoinGecko The following are some examples of how to get started: CoinGlass. This was the third-worst quarter in ETH’s history, going back to 2016.
When Ethereum developers began to develop the platform, it was user activity that drove ETH value. You may also like In August 2021, a mechanism for burning fees called EIP-1559 will be implemented.
Ethereum users used to pay transaction fees to the miners. The network began burning these instead. This reduced the currency’s supply relative to the network’s activity.
Ethereum is a cryptocurrency that was first launched in 2009. proof-of-stake The consensus model will make miners redundant by 2022 Reduced drastically In addition to reducing the emissions of the network, the new ETH issue rate was also reduced. All of these upgrades have made Ethereum’s circulation supply deflationary.
EIP-4844This changed when a layer-2 upgrade significantly decreased the amount of ETH used by these networks. Transaction fees on Ethereum have also fallen as users gravitate towards scaling solutions. They recently hit a 5-year-low of $0.40.
Ethereum users paid up to $2,000 in gas fees during the Crypto Boom of the Pandemic Era. A single transaction of $4,000. NFTs were an important source of congestion. Bored Ape Yacht Club.
Tokenize everything
Some analysts think that ETH will become deflationary if Wall Street migrates to the blockchain and institutions bring trillions of dollar assets along with them.
Tokenization refers to the act of converting real-world assets like stocks and bonds into digital tokens on a blockchain.
In a letter to shareholders, Larry Fink, CEO of the world’s largest asset manager, BlackRock, mentioned The term is used a dozen or more times.
Fink writes: “I believe tokenized fund will one day be familiar to investors like ETFs,” he said. “Every stock, every bond, every fund—every asset—can be tokenized.”
In total, 54% (or $5 billion) of Ethereum’s market is made up of tokenized assets. RWA.xyz. Stablecoins are excluded from the measure, as they’re often backed up by U.S. Treasury bills and cash.
According to an October paper by Boston Consulting Group, this sum could grow by as much as $16 trillion. Estimates from experts can vary significantly.
“We're not seeing the economic benefits from tokenization yet,” Bitwise Senior Investment Strategist Juan Leon told Decrypt. “This is going to take longer than people want it to because these large asset managers don't move very quickly.”
James Rubin is the editor
