There have been several theoretical deflationary properties noticed in the London upgrade of Ethereum last week. This has led to major action on the blockchain itself- with almost 800 deflationary blocks already produced.
Also, a spike in the transaction fee of the cryptocurrency went on to result in a burn rate that lasted for around two hours. Interestingly, this took place when the supply of cryptocurrency was deflationary. As it stands, the network is currently under heavy load for the last couple of days- which has resulted in more gas being burnt.
Ethereum Burning More Than It Can Produce
The Burn Bot of Ethereum went on to record an instance where almost 545 Ether was seemingly burnt over a period of an hour. With the issuance of this cryptocurrency reported at a sum of 532 ETH per hour, it also factored in the asset seeing deflation of minus 13 ETH for that period.
The Burn Bot also managed to pick up on a larger deflationary burn a few hours later, where 945 tokens were burned within the hour which led the currency to have a temporary negative issuance of -417 ETH. The annualized deflation rate came to a value of -3.12%.
Now, when the amount of Ethereum burnt is far greater than the reward dished out for mining, it leads to the production of several deflationary blocks which halts the supply. This was first observed by a tracker from Carbono, an advisory firm for the cryptocurrency, which also ended up reporting that there were around 791 deflationary blocks so far. The firm defined these blocks where the burned fee went beyond the mined ETH.
This news is not positive for the users of Ethereum- with the gas prices increasing considerably. Yet, according to information provided by BitInfoCharts, the average price of a transaction does climb to a sum of $20 after a low of around $4 in the latter part of July. The gas tracker of Etherscan has also reported around $28.60 for a token swap.