ETH - Why Is Nobody Talking About This New Feature of Ethereum?
When most investors think about buying Ethereum (CRYPTO: ETH) these days, they are most likely focusing on all the efficiencies and performance enhancements made possible by The Merge. As a result of this transition from a proof-of-work blockchain to a proof-of-stake blockchain in September, Ethereum has become much more attractive to long-term investors.
But what many investors may not be focusing on is the fact that Ethereum is now a deflationary asset. The transition to proof-of-stake, combined with a fee-burning mechanism that went into effect last year, means that the supply of Ethereum in circulation is now declining. Let's take a closer look at why this makes Ethereum more attractive to investors.
The goal of the new fee-burning mechanism (formally known as EIP-1559) was to change the way transaction fees were calculated on the Ethereum blockchain. With each new transaction, Ethereum began to "burn" (remove from circulation) part of every transaction fee. This had the net impact of slowing the rate of new Ethereum issuance.
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Why Is Nobody Talking About This New Feature of Ethereum?