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Because while the fee burn does act as a deflationary force on the eth economy, there is still the inflationary force of the staking rewards. If transaction vol
by yokem55 6y ago
Because while the fee burn does act as a deflationary force on the eth economy, there is still the inflationary force of the staking rewards. If transaction volume falls too much, then the staking rewards will outpace the fees burned and the eth economy will see overall inflation. At some point (insert hand-waivium here) an equilibrium will be reached between transaction demand, eth asset price, and staking demand (as more eth is staked, individual staking returns will fall, but overall inflation goes up).