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After the transition of the Ethereum (ETH) blockchain to the PoS consensus algorithm, the cryptocurrency's inflation rate decreased by 99.6%.
According to the ultra sound money service, now the ETH inflation rate is 0.014% per year. When the network was running on the PoW consensus algorithm, this figure reached 3.58%.
The inflation rate of ETH on PoS (blue line), Bitcoin (yellow) and ETH on PoW (white)
Since the release of the Merge update on September 15, which marked the beginning of the work of validators on the Ethereum blockchain, only 4765 ETH have been created on the network. If digital assets continued to mine, the number of coins issued would be 1.25 million.
In addition, thanks to the Ethereum destruction mechanism launched in August 2021, altcoin stocks decreased by 0.01%. Thus, ETH has become a deflationary asset. According to the estimates of the ultra sound money portal, during the year, members of the crypto community burned about 639,000 ETH.
Obviously, a decrease in the number of coins in circulation should provoke an increase in the Ethereum exchange rate, but so far this has not happened. Compared to September 15, ETH fell in price by 25%, but on November 22, a bullish trend appeared on the market, so the cryptocurrency is likely to gradually become more expensive.
