The network of Ethereum is currently witnessing its first consecutive week of a highly negative supply issuance with the transaction fees getting higher. With the London upgrade being highly anticipated throughout the cryptocurrency market, the double-edged sword has brought out a burn mechanism into the fee market of ETH as early as August- where a small quantity of the cryptocurrency is being destroyed with every single transaction that is currently taking place on the network.
Ethereum In A Spot of Bother
With the extreme levels of gas prices, Ethereum is currently seeing a series of days of deflationary issuance for this network- which implies that more of this cryptocurrency keeps getting removed from the supply- than is created through the mining itself. Now, for the cryptocurrency to keep putting up deflationary blocks, the gas prices should remain at a level above 150 gwei.
Anthony Sassano, the co-founder of EthHub, recently mentioned that Ethereum was not really considered to merge- when the blockchain of ETH would be merging with the Beacon Chain of Eth 2.0- which is currently going to occur during the very first half of 2022.
According to the fee burning tracker of Ultrasound. Money, close to 15,000 ETH will be continuously burnt. When this factors in the rate of new tokens coming to the market, the reports claim that the weekly net issuance is of -8,034 ETH tokens.
Despite the first deflationary week of Ethereum, quite a few advocates have been looking for users to start migrating through layer-two ecosystems. As reported by L2Beat, the Total Value Locked of the cryptocurrency across layer-two networks is $4.68 billion. The TVL has had a surge of 500% over the last couple of months with the number of users expanding exponentially.