55 days after the update ofThe Merge,ethereumis not already issuing tokens.Your condition of currency deflationary and “ultra-sound” is therefore indisputable, but its stock has failed more than 18%.
"Dogcryptocurrenciesto become a millionaire?Yes, if you're a billionaire,”... if you follow the crypto community on Twitter, you've probably seen this meme circulating since the fall of FTX.
In a matter of hours, the market capitalization of themarket and cryptofell below the mark of us$800 billion, at a loss of 14%.For investors,the day following the collapse of the FTX was a disaster in any measure. However, here is something that might cheer you up.
Ethereum: The Fusion
ETH becomes deflationary
Ethereum: a coin “Ultra Sound”
if capped-supply BTC is sound money 📢decreasing-supply ETH is ultrasound money 🦇pic.twitter.com/Y9N8HBmHBr— Justin Ðrake 🦇🔊 (@drakefjustin)September 10, 2020
Unlike Bitcoin, the supply of Ethereum was not fixed.But after his rise after the update of The Merge,Ethereum is often referred to as a currency “Ultra Sound”.Sound money is an asset whose supply is fixed and whose value increases with time.
However, in “ultra-strong” coin is an asset whose total supply decreases (deflation), and increases in value over time.
After introducing a mechanism of reduction of tariffs with the update EIP-1559 , Ethereum has become, according to its advocates, in a currency that is Ultra Sound.
What does this really mean?
To better understand the concept of currency, Ultra Sound, consider the following example:
Before The Merge,the amount of ETH issued per day is calculated in the following way:(1) Rewards block to miners + (2) Rewards staker PoS – (3) Rates of ETH burned by EIP-1559.
The official blog of Ethereum has published an example of emission of ETH before the infamous fusion of networks on the 8th of November.
After the transition, the rewards of block are no longer generated in the execution layer or in the core network.
“After the upgrade of the rules of consensus, Proof of work is no longer used for the production of blocks.All the activity of the execution layer is grouped in blocks of beacons, which are published and verified by proof of participation validators.The rewards distributed by post and validate blocksof beacons are accounted for separately in the layer of consensus.”
Since the issue of the execution layer became zero after The Merge, the total amount of ETH newly issued will be calculated in the following way: (2) Rewards of participation of PoS – (3) ETH burned by the EIP - 1559.
Expected result: the number of users of the network will continue to increase until the amount of ETH burned by EIP-1559 exceeds the amount of ETH distributed as rewards for participation.From there, ETH will begin to become deflationary.
Do these expectations correspond with reality?
Ethereum is getting stronger
The objectives set by the community of the altcoin largest and second largest cryptocurrency in the world, they are a reality.
The data reveal that you have burned more than 3,000 ETH, or more than $4 million,which means that Ethereum could become deflationary very soon.This is because the amount of new ETH is less than the amount of ETH burned.
The total supply of ETH has fallen sharply,reaching a rate ofinflationof the 0.021% per year.This is a very positive sign that reveals that ETH will become a deflationary cryptocurrency, or at least a cryptocurrency of inflation is really low.
Before The Merge,the term “Ultra Sound” was on everyone's lips, but now takes on its full meaning.This change will allow investors to generate a return of4-5% (currently 4.3%)in the betting Ethereum.
One of the reasons why many support the view of money ultra solid for Ethereum.This event would increase the probability of adoption of ETH, both institutional and commercial.
centralization disturbance
Some specialistsbelieve that the network Ethereum will eventually become a centralized institution.In fact, the whales could absorb large amounts of ETH and, ultimately, dominate a large part of the network.
The data from Dune Analyticsreveal that Lido manages 4,529,312 of ETHstake, or 30.4%of the total group.coinbase(13.89%) andkraken(7.99%) occupy the second and third place, respectively.
Obviously, this centralization is a problem, as the investors or companies that have these large sums of money, they could see their funds blocked for one reason or another, which could affect the entire network of Ethereum.
In the same way, the new version PoS Ethereum could cede the main stakeholders, i.e., the validators that protect the network, the power to block transactions in accordance with regulatory requirements and at the expense of the confidential nature and decentralized las criptomonedas.
The other major issue that could arise is Ethereum censorship. In fact, the MEV Watch platform reveals that some MEV (Maximum Extractable Value) enhancement software are regulated by OFAC, which means that you can censor certain transactions if the authorities deem it necessary.
Currently, 71% of the blocks of Ethereum comply with the regulations OFAC. A figure that has increased considerably compared to the end of September, when not above 25%.
OFAC, or Office of Foreign Assets Control, is the US agency that enforces US economic sanctions. This is the regulatory body that sanctioned Tornado Cash and all addresses associated with him.
For example, Flashbots, the largest MEV-Boost relay , refuses to process any transactions related to crypto mixer Tornado Cash.
ETH price falls in the network
The token native Ethereum, ETH, suffered another correction, which was exacerbated by the collapse of the exchange of encryption FTX. Despite a slight rebound, the price of ETH is currently around 1,270 dollars, a 74% less than its historical peak.
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