Applause was given to Ethereum (ETH) following the successful passage of EIP-1559, which enabled a method for paid gas costs associated with network transactions to be burnt. That was the beginning of a period of deflation for the cryptocurrency that now ranks in second place in terms of market value.
The daily burn volume of ETH is said to have achieved a new all-time high of 5,580 ETH on February 14, according to information obtained from the block explorer site Etherscan.
Since the 14th of February, the amount of Ethereum that has been burnt has decreased by more than 50 percent, reaching 2,700 ETH on March 5th. Scarcity rises when more ETH is destroyed, which eventually drives up the price of the cryptocurrency.
As a direct result of this, the decrease in the burn rate is likely to have had a considerable influence on the total net supply of ETH during the last several weeks. And if the trend does not change, it has the potential to drive Ethereum prices into negative territory.
The amount of non-fungible token trades is a sign of a fundamental fall in the value of the Ethereum network, which may lead to a price drop.