Researchers from a university in Australia have gone on to question the reputation of Bitcoin, by claiming ETH would be the first deflationary currency. A paper on the 18th of November by four researchers discusses how the EIP or Ethereum Improvement Proposal 1559 upgrade makes Ethereum a potentially better store of value.
This research was co-authored by Ester Felez-Vinas from the Sydney University of Technology, Jonathan Karlsen from the University of Western Australia, Sean Foley from Macquarie University, and Jiri Svec from the University of Sydney.
ETH As ‘Ultrasound Money’
The ETH Investment Proposal by the four researchers from Australia also went on to see the network burning off a major portion of their transaction fees with close to a million tokens being burnt from the 118,583,580 circulating supply.
At times, the report also goes on to say that the fees of transactions that went on to amount to more than 50% of the 12,000 newly minted tokens per day were also burned due to the EIP-1559. Most researchers believe that with the increase in the demand for Ether, more tokens would be burned due to the robust ecosystem of decentralized finance applications.
The Australian researchers believe that ETH is far less inflationary than Bitcoin. They stated that if the rate of Ethereum creation is annualized, the expected increase in the total supply of Ethereum is only 0.98%, is less than half the 1.99% increase in the supply of Bitcoin which is quite certain in the same period. The researchers finally concluded that Ether would provide far better inflationary hedging properties than Bitcoin, and could therefore offer long-term value storage which is superior to Bitcoin.
Proponents of Ethereum have started calling ETH as ultrasound money in response to Bitcoin investors touting Bitcoin as sound money or hard money.