Glassnode Ethereum will become deflational after The Merge

Glassnode: Ethereum will become deflational after The Merge

Glassnode analysts came to the conclusion that after activating the update of The Merge, Ethereum cryptocurrency is most likely to be deflation.

The Chart Below Presents $ Eth Issuance Under Two Scenarios:

🟠 $ ETH ISSUD on Both Pow + Pos Chains, with the EIP1559 Burn.

🔵 $ ETH ISSUED ON POS + EIP1559, Simulating A Merge Going Live in Aug 2021, Demonstrating a High Chance of Supply Deflation. Pic.Twitter.COM/1gheodgguw

– Glassnode (@glassnode) September 5, 2022

On the schedule attached to the tweet, the ETH emission indicators are simulated at:

  • The current release of coins on two chains-POW and POS-and the action of the mechanism of burning tokens EIP-1559;
  • the operation of the system after the activation of The Merge, held as part of the model in August 2021.

“With the exception of August of this year, when the average cost of gas was below 20 Gwei, a modeled POS-concept in a tandem with the EIP-1559 is deflationary,” the researchers emphasized.

Experts recalled that the rate of emission ETH on Beacon Chain will grow as the number of validators increases.

“Suppose Merge will be successful. It is likely that the bullet of the validators will grow, since fears about technical risks will disappear, ”experts said.

According to their observations, the current annual yield of validators is 4.44%.

According to the Ultrasound Money service, predicted after The Merge, the annual pace of Ethereum emission is 0.3%.

Every day 730.06 ETH is burned. 2.6 million Ethereum tokens have been destroyed since the activation of the EIP-1559.

Recall that the migration of the second in capitalization of cryptocurrency on POS is scheduled for approximately on September 15-16.

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