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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Ethereum Scarcity: After London Fork, ETH’s Supply Change Drops To Almost Zero

Keshav Verma
Keshav Verma
3 years ago
3 mins read
Ethereum London fork Scarcity

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On-chain data shows Ethereum  supply is barely changing anymore following the London hard fork. This means ETH is becoming a scarce asset now.

Following London Fork, Ethereum Supply Rate Of Change Drops To Nearly Zero

As pointed out by a CryptoQuant post, ETH’s supply curve has nearly flattened now as rate of change drops to almost zero. This has made the asset scarce.

The Ethereum supply indicator tells us about the total amount of ETH that’s currently in circulation. As miners receive a block reward (in ETH) for mining blocks, this total supply increases with time.

A related metric, the Ethereum supply rate of change shows how fast or slow the total circulating supply is going up.

How ETH’s supply works is different from Bitcoin; the latter has its total potential supply locked from the beginning. This means that there can come a point when miners will run out of BTC to mine.

Ethereum has no such limit so miners can indefinitely keep it up and the supply will keep on increasing. This would be problematic for the crypto as it will result in higher volatility.

The London hard fork exists to tackle this issue. As you know, to complete a transaction on the ETH network, you need to pay gas fees. This fees was originally given to miners. who put these coins back into circulation. But since the London fork, the fees is “burned,” and miners no longer receive it.

Related Reading | Discord Planned To Integrate Ethereum. Huge Backlash Made Them Cancel Everything

Now, what happens is that burning acts as a sort of deflationary measure as it reduces the total supply. Miners still mine ETH, but burning makes up for the amount mined.

Here is a chart that shows what effect the London Fork has had on Ethereum’s supply:

ETH's supply curve seems to be flattening | Source: CryptoQuant

As you can see in the above graph, the rate of change of the Ethereum supply has dropped off to nearly zero following the EIP-1559 launch.

This has lead to a flattening of the total circulating supply. Now, ETH is also becoming a scarce asset, just like Bitcoin. A limited supply can push the price of the crypto up due to demand-supply dynamics.

Related Reading | Ethereum Miner Revenue Outpaces Bitcoin In 2021

ETH Price

At the time of writing, Ethereum’s price floats around $4.57k, up 2% in the last seven days. Over the past month, the crypto has gained 30% in value.

The below chart shows the trend in the price of the coin over the last five days.

Ethereum Price Chart

Ethereum's price has crashed in the last few days after setting a new all-time high | Source: ETHUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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