Here’s another LATOKEN review, and we want to talk about Ethereum and name the fundamental factors that, in theory, might provoke the “explosive” growth of Ethereum (ETH).
Ethereum’s “London” hard fork
One of the key features can be called the recent change to the altcoin blockchain, resulting in a mechanism for burning digital coins being introduced. On August 5, the London update was released on the Ethereum network, which completely changed the mechanism for calculating transaction fees. As a result, some of the commissions that miners previously received as a reward are now burned.
Token burning is the destruction of a certain number of tokens to reduce their number in circulation. This method is used to combat inflation and increase the value of cryptocurrencies. All coin-burning operations are recorded on the blockchain as a transaction, so anyone can verify that the coins have been destroyed.
Do you want to know more about token burning? Then read the article “What is token burning, and why are developers destroying cryptocurrency?”
According to the ultrasound.money service, since the activation of the update, more than 134.8 thousand Ethereum worth $427,5 million have been burned in the altcoin network. The average burn rate per minute is 3.77 Ethereum.
The decline in net inflation
The second growth factor is the decline in net inflation in Ethereum. According to experts, at the moment, the net inflation of the altcoin in annual terms is 1.1%, while the same indicator for Bitcoin is 1.75%.
Growth of funds blocked in DeFi
Also, do not forget about the multiple growths of funds blocked in the decentralized finance (DeFi) sector. It is the third factor contributing to the rise in Ethereum’s price. On January 1 of this year, the volume of funds blocked in DeFi was $16 billion. On August 30, it was $82 billion (an increase of 412% since the beginning of the year), according to DeFi Pulse.
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