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According to ultrasound.money, Ethereum's current 30d inflation rate is 4.1% annualized. If the merge were already behind us (flip the "simulate merge" switch),
by everfree 4y ago
According to ultrasound.money, Ethereum's current 30d inflation rate is 4.1% annualized. If the merge were already behind us (flip the "simulate merge" switch), inflation would be 0.1%.
So, not quite deflationary but pretty close. If Ethereum network usage picks up again like it did in 2021, Ethereum will experience long stretches of time where it is deflationary.
https://ultrasound.money/ https://ultrasound.money/
- coolspot 4y agoNot sure this is correct. PoS issuance rewards are 4.6%/year, which can be offset with burn rate, but it is at 0.5% now. The site projects that in 200 years, burn and issuance will be at equilibrium.
- everfree 4y ago> PoS issuance rewards are 4.6%/year PoS issuance is 4.6%/year per staked ETH. Only 14M of the total 120M ETH are staked right now, making the real issuance only 0.5%/year when taken as a percentage of total ETH supply. Subtract the 0.5% burn rate from that 0.5% real issuance rate (with rounding errors), and that's how you get Ethereum's current situation of being "pretty close" to deflationary.
- coolspot 4y agoThank you for explaining! Will gas fees burn or go to stakers?
- everfree 4y agoPart is burned, part goes to stakers. EIP-1559 is the Ethereum patch that introduced the fee burn in Aug 2021. It's a bit complex, but basically speaking, the higher demand is for the network, the more expensive transactions become and the more ETH gets burned.
- dsimmons 4y agoThis. Based on current activity, it gets close, but if/once fees rise again, there's a threshold above which it becomes net deflationary.