The Ethereum Ecosystem consists of a diversified ecosystem, which consists of Dapps, NFTs, DeFi Protocols and it is now better, faster than cheaper than it previously was.  The coin supply decreasing is one more reason to invest in the deflationary asset.

Investopedia Definition:”Burning” a cryptocurrency refers to the act of sending a token to an account that can only receive them. Wallet addresses used for burning cryptocurrency are called “burner” or “eater” addresses. The act of burning effectively removes tokens from the available supply, which decreases the number in circulation.”

ETHEREUM BURNING MECHANISM

The goal of fee-burning mechanism in Ethereum (formally known as EIP-1559) was to change the way transaction fees were calculated on the Ethereum blockchain. With every new transaction, Ethereum begins to “burn” (remove from circulation) part of every transaction fee.

The supply of Ethereum coins in circulation is coming down because of the fee-burning mechanism.  Ethereum officially is a deflationary asset in November, 2022.  Thus, Ethereum’s new deflationary status implies that it is a potential safe-haven asset.

ETHEREUM OFFICIALLY IS A DEFLATIONARY ASSET

The Merge officially contributed to performance enhancement and efficiencies in Ethereum (ETH). Ethereum successfully transited from being a PoW (Proof of Work) Asset to PoS (Proof of Stakes) Asset type. Thus, Ethereum is now very attractive to long-term customers.  When Ethereum Network was proof-of-work, it had to pay out rewards to miners.  However, now it is proof-of-stake (PoS); therefore, it no longer must pay out rewards to miners.

The burning mechanism works according to the overall network activity.  The lack of transactional volume and its interactions with smart contract will create situations where ETH need not be used in the transaction and therefore there will be low ETH transaction and less burning activities.

The highest burning rates happens during NFTs and DeFi transactions. So, the burning rate will be comparatively less until the high NFTs and Defi transactions resume – however, still with any kind of burn the scarcity is being decreased.

ETHEREUM ULTRASOUND MONEY

Deflationary with burning means the numbers of ETH is declining.  Before, The Merge, Ethereum Network was an inflationary cryptocurrency.  The new fee burning did not slow down the overall uptrend for ETH. Several investors point to Ethereum as the Ultrasound money.

The way Ethereum pulled off Ethereum makes it worthy of being considered as a long-term investment by those who are prospecting to have a long-term investment to protect their investments from inflation.