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Crypto: Ethereum incinerates $12.7 billion in ETH

Sat 04 May 2024 ▪ 3 min of reading ▪ by Evans S.
Getting informed Altcoins

Ethereum is distinguished by an operation of remarkable audacity in the crypto sphere: the burning of 12.7 billion dollars’ worth of ETH. This strategic move, far from being a mere supply reduction, reveals a profound vision and a commitment to the stability and longevity of the cryptocurrency.

Ethereum burn

Ethereum and the Reduction of Its Crypto Supply

The burning of ETH, implemented following a major upgrade of Ethereum thousand days ago, involves the destruction of a portion of the transaction fees.

This process no longer rewards the miners with these fees, but rather removes them from circulation, inducing a notable deflationary effect.

To date, approximately 4.3 million ETH have been eliminated, marking a decisive shift in the platform’s monetary policy.

This reduction in supply aims to increase the scarcity of the ETH crypto, which, theoretically, could support or increase its value in the market.

Comparable to stock buybacks in the financial world, this strategy can promote an appreciation of the price, thereby offering investors an opportunity for gain, provided the demand remains stable or increases.

The crypto market’s reaction to this massive burn has been predominantly positive, interpreted as a sign of maturity and responsibility on the part of Ethereum’s developers.

By controlling inflation and reinforcing user trust, Ethereum solidifies its position as a leader among alternative cryptocurrencies.

Economic and Technical Implications

Through this burn, Ethereum also improves the security and stability of its network. This makes a majority control less attractive in a Proof of Stake framework. Thus, the ETH crypto becomes more resistant to manipulation attempts, ensuring greater reliability for large-scale transactions.

The burning process also acts as a catalyst for innovation. By adjusting its economic structure, Ethereum encourages developers to design cost-optimized decentralized applications (dApps), promoting the emergence of new uses and functionalities within the ecosystem.

In the long term, this strategy could redefine the economic landscape of cryptocurrencies. Ethereum positions itself as a technological platform and a strategic economic player, positively influencing its own economy and that of the sector more broadly. Meanwhile, the rush of investors continues.

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Evans S. avatar
Evans S.

Fasciné par le bitcoin depuis 2017, Evariste n'a cessé de se documenter sur le sujet. Si son premier intérêt s'est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l'état du secteur dans son ensemble.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.