THE EthereumThe second largest cryptocurrency in the market, returned to Register inflation in its financial basis This week. This is This happens the first time in the past two years.
The story starts in September 2022, when the developers the The merge update. In addition to migrating proof-of-work to proof-of-stake, she also presented drastic changes in her economic model.
Added to partial combustion of transaction rates, Implemented in 2021The merger has reduced the reward of the validators. With that, the Eth became a deflatoire currencycome to Reduce its current range by a maximum of 0.38% per year.
Ethereum has inflation again
The term sick currency has been created to describe gold coins that had a unique sound compared to fake coins. Later the term was also used to describe strong currencies, including digital.
Since the merger, The Ethereum community began to call the Ethi “Ultrazuigige Caluta” (Ultra sound money). That is, a play of words to point out that the ether was better than gold and bitcoin because they are not only scarce, but also to be a deflatory currency.
However, these claims in monetary policy have not thought about the price and the Ethereum reached its lowest level of the past 4 years against Bitcoin This week.
Added to this, the Ethereum again presented inflation in his monetary basis for the first time since January 2023Losing this narrative power.
Next to Criticism of Ethereum Foundation and community pressure for changes in its leadershipVitalik Buterin Cryptocurrency Loses space for rivals such as Solana. Even the use of second -layer solutions for Ethereum, for which no ETH is used by the user, helps to explain these figures.
Although the developers are planning to start a new important update in March, the PectraIt is hard to believe it will encourage the market.
Anyway, the merger numbers remain great compared to the old model that, if actively, register an inflation of 3.3% per year.
ETH also benefits against Bitcoin. However, it is important to note that Bitcoin is limited to 21 million units and that the dumbbells will reduce this inflation by half every 4 years, on average, while Ethereum has no limit and today depends on the use of the network.
Moreover, Bitcoin has the same economic model since the launch. On the other hand, Ethereum has undergone various changes and You can change againThose uncertain investors can leave behind.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
