Tanya Abrosimova
Independent Analyst
- ETH/USD has resumed the recovery after a sharp correction.
- The transition to Ethereum 2.0 will lead to a reduced ETH supply.
ETH/USD hit $202.45 low on April 30 amid sharp downside correction that followed a strong bullish run on the cryptocurrency markets. However, by the time of writing, the second-largest digital asset managed to regain ground and settled above $214.00. ETH/USD is unchanged on a day-to-day basis and 4% higher from the start of the day. Ethereum’s market capitalization has reduced to $23 billion, while an average daily trading volume settled at $26 billion.
ETH issuance is set to drop
According to Ethereum co-founder Vitalik Buterin, ETH issuance will be reduced significantly after Ethereum 2.0 goes live. Speaking in the podcast with POV Crypto called “Internet Money”, he explained, why the team had chosen to upgrade consensus mechanism to Proof of Stake.
One of the reasons why we’re doing Proof of Stake is because we want to greatly reduce the issuance. So in the specs for ETH 2.0 I think we have put out a calculation that the theoretical maximum issuance would be something like 2 million a year if literally everyone participates.
He expects that the annual issuance will amount to around 100,000 -2 million ETH against 4.7 million ETH issued annually within the current network. Moreover, high transaction volumes will lead to the net reduction of the circulation supply as a portion of each fee will be burnt.
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