Crypto This Week 08/08 – 14/08 (Market, BTC…)

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2021-10-28 01:22:44

Market Perspective

Hello everyone, another week has passed and we meet again in the weekend newsletter on CHK.

Blue is back, so glad it did. 💎🙌 my friend.

Contrary to the green in the market, the legal FUD in the past few days has really stood out. To be honest with you, the information related to this issue is not very clear to me, so I can’t share it with everyone. However, Mr. Thuan Lam is the person who can provide the fastest and most detailed information to everyone through:

Follow us to keep up to date with the latest market news.

This week, another prominent event that everyone who follows CHK knows about is the update of EIP 1559 on the Ethereum mainnet. This can be considered as the most core move that changes the economics of the Ethereum Blockchain network. And in this week’s newsletter, I will share more deeply about the issue of “burn 🔥 ETH”.

Up to now, as I write this article, 12,415 ETH has been burned. You can view the information directly here

The amount of eth burned increases rapidly, but is what we are hearing or seeing really making ETH more scarce? Or is it just a trick to push the price? Let’s clarify the above issues below.

How much ETH will EIP 1559 burn?

Basically, whenever the Ethereum network is used, ETH is burned – meaning that every time a transaction is made on Uniswap or an NFT trade…, the ETH holders will essentially be will be paid through this mechanism. ETH will always be burned through every block, through any transaction. And from this, we can easily deduce that there will be more ETH removed from circulation during periods of high network activity (i.e. when gas prices rise and block space becomes scarcer, and less when the opposite happens).

Let’s assume, EIP 1559 was launched with the mainnet of ETH in August 2015. So, how much ETH will be in circulation now?

Currently, the total ETH supply sits at around 116.9 million and if EIP 1559 is implemented on Ethereum’s August 2015 mainnet launch then 2.9 million, 1.9 million, and 994k ETH will be burned cumulatively at the rate. the base fee is 75%, 50% and 25% respectively.

This means that the ETH supply should theoretically be between 114-115.9 million at present.

While the number may not seem large, it is still a significant drop in total issuance, as the ETH supply will decrease by 0.85%, 1.70% and 2.55% depending on the rate.

If estimated at the same rate of the above assumption, ETH worth between $1.16-3.50 billion has been burned during Ethereum’s lifetime. The low end of the foregoing range is equivalent to burning through the entire market cap of SushiSwap, while the top is overvalued in excess of the combined market capitalization of Yearn and Compound. 🤯

Not a small number at all, right people. And this number is even higher as GAS fees soar and ETH price is set to new ATH peaks.

Now we have seen how much ETH has been burned and the question: Has Ether become deflationary? should be considered by us next.

To determine this, we would have to look at the total number of Ether issuances throughout 2021 and subtract the assumed fee from that.

As we can see, there were 2.24 million ETH issued in the first seven months of 2021, or 10,418 ETH per day. On that basis, 3.8 million ETH will be added to the total supply, which equates to a 3.33% increase.

Using the same data from the above assumption, when EIP 1559 takes effect, 1.4 million, 935,000, and 467,000 ETH will be burned with a base fee of 75%, 50%, and 25% respectively. This means 6511, 4348 and 2172 ETH are burned daily.

From this, we can see that with EIP 1559, the daily net issuance of ETH will be 3907 – 8246 ETH, a decrease of 20 – 62%. When converted annually, new net issuance will fall between 1.44 – 3.04 million, which means ETH will have a net inflation rate of 1.26% -2.66%.

While it is not deflation yet, it is still a significant drop in the total supply in the market.

However, what if we use this number for the Ethereum network once the merge has been completed?

According to estimates provided by ETH Hub, even if there were 100 million ETH staked (which is not really economically viable), the maximum annual issuance of ETH would be only 1.81 million, at least. 52% more than the expected increase in 2021 according to Proof-Of-Work.

As we can see, based on current supply and 2021 annual burn figures (both subject to change of course and these are raw data only), ryes there is a chance that ETH will deflate after converting to Proof -Of-Stake. Depending on the write speed, Ether’s inflation rate could drop as low as -1.05% of the total supply.

Really then ETH will become an extremely good currency 🦇🔊.

***Data sources: Bankless

Next Week’s Event

Notable events for everyone next week:

  • August 11 – August 12: Futurist Conference 2021 is the largest and most popular blockchain & emerging technology event in Canada. Like other conferences, this annual event is designed to foster participation from conference guests.

  • August 12 – August 13: 2021 Asia CryptoAsset Conference The event was held in Shanghai, China. The conference aims to share information about the cryptocurrency market between China and the world, as well as promote the development of the global cryptocurrency market.

Below are notable news from the projects:

These are the important information in the coming week, hope that the information I provide in this article will help everyone.

Hello everyone and have a great weekend.

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