Cryptocurrency Q&A
Is ETH 2.0 deflationary?
Is ETH 2.0 deflationary?
Stefano
Wed Dec 25 2024
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6 answers
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I've been hearing a lot about Ethereum 2.0 recently and I'm curious if it's deflationary. I know that some cryptocurrencies have deflationary mechanisms built into them, so I'm wondering if ETH 2.0 follows the same pattern.
6 answers
amelia_doe_explorer
Fri Dec 27 2024
As a consequence, the ETH supply has transitioned into a net deflationary state, as illustrated in Figure 1.
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Raffaele
Fri Dec 27 2024
Additionally, this demand incentivizes higher levels of network security, as stakeholders aim to protect their investments.
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GeishaGrace
Fri Dec 27 2024
This transition is a direct result of the burn mechanism, which reduces the total supply of ETH over time.
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Elena
Fri Dec 27 2024
The Ethereum network's utilization and associated high fees play a crucial role in this process.
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Margherita
Fri Dec 27 2024
The increasing demand for network usage generates a flywheel effect, driving up the value of ETH.
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