Why does the merged ETH experience deflation?

Almost a whole year ago, on August 5, 2021, Ethereum launched EIP-1559, an upgrade that changed the way Ethereum managed its transaction fees. Rather than simply paying the entire transaction cost to the miners, it would be better to destroy the majority.

There are many reasons for doing so.

After the merger, ETH production will be reduced by at least 90%, and the proportion of ETH destruction in each block will also increase accordingly.

When the gas cost of Ethereum is greater than or equal to 7gwei, the speed of ETH destruction will be greater than the issuing speed of ETH, reducing the total supply of ETH.

During the peak of the bull market, the gas fee price remains at 200gwei or higher, which continues for many months. Even in the current bear market, it can still be achieved.

Click here to review the historical prices of Gas fees.

Click here to simulate the circulation after ETH merger.