The amount of Ethereum held in cryptocurrency exchanges is reportedly lower. Analysts opine that this decline is bullish for the token. The decline per dailyhodl publication is 18%. This is because holders are probably holding it for their dear life. They are locking away their Ethereum and BTC holdings for safe keeping. Funds which move away from the exchanges will lower the risk of major sell offs.
Reportedly, ETH whale addresses that hold 10K+ coins now hold nearly 70% or more supply for the first time. ETH address activity is also reportedly improving. The price of the Altcoins rebound when the there is an increase in the Ethereum address activity. When it comes to assessing price trends, the activity of the wallets matter in a great deal and of course the volume of the coins in the exchanges.
In terms of the miners and stakers, the anticipation for the EIP-1559 is increasing. The testnet launch on Ropsten followed by the London Upgrade to be deployed on the Ethereum’s Goerli, Rinkeby and Kovan testnets in weekly intervals will help implement the PoS consensus on the Ethereum Network.
The London upgrade will be bringing in 5 EIPs, which will be deployed on the testnets like EIP-1559, EIP-3198, EIP-3529, EIP-3541 and EIP-3554.
There is a lot of discussion happening around EIP-1559 transaction pricing mechanism, which consists of a fixed per-block network fee that is burned and allows the dynamic expansion and contraction of block sizes to address the congestion issue.
“Burning the base fee should put a deflationary pressure on the issuance of ETH, though modeling exactly how deflationary is difficult since you have to project variables like expected transactions, and, even harder to predict, expected network congestion. In theory, the more transactions that occur, the more deflationary pressure that the burning of the base fee will have on the overall Ethereum supply.”
James Beck, Director of communications and content at ConsenSys talking to Coin telegraph expressed: “Burning the base fee should put a deflationary pressure on the issuance of ETH, though modeling exactly how deflationary is difficult since you have to project variables like expected transactions, and, even harder to predict, expected network congestion. In theory, the more transactions that occur, the more deflationary pressure that the burning of the base fee will have on the overall Ethereum supply.”
There are other analysts who opine that this transaction fee will have an adverse effect on the network. A fees war can probably be created when users become willing to spend extra to speed up their transactions.
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