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Tuesday, June 25, 2024

Stats Reveal Accelerated ETH Burn Rate Caused by Meme Coin Pumps

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  • The popularity of meme currencies, such as PEPE, has caused a surge in Ethereum network activity, resulting in a high burn rate of ETH.
  • Over the past month, approximately 23% of the total ETH burnt since the Merge occurred has been destroyed.
  • ETH is facing increased pressure due to the significant surge in the latest wave of popular meme coins, leading to even higher gas fees.

PEPE and other Memecoins trading activity is putting deflationary pressure on ETH. According to ultrasound.money, over 60K ETH has been net burned since the Merge, representing a 2,62% annual supply reduction ceteris paribus,”holding other things constant,” or “all else being equal.”

Uniswap, the largest decentralized exchange on the Ethereum network, accounts for the most significant burning, with around 32,800 ETH burnt in the last 30 days. In the previous seven days, over 45,000 ETH was burnt, resulting in a current burn rate of 4.53 ETH per minute with a 3.47x issuance offset rate.

Despite the high gas prices, Ethereum remains the favored network for new projects, with PEPE, WOJAK, and TURBO alone generating nearly $3 billion in trade activity. If this trend continues, the burning of ETH fees is likely to increase, leading to more ETH being removed from circulation and positively impacting the price of ETH in the future.

Over the past 24 hours, there has been a price change of -$49.19 (-2.57%) in the price of ETH, with the 24-hour low and high at $1,839.89 and $1,934.00, respectively. The trading volume during this period was $8,836,988,765, accounting for 9.31% of the total volume.

However, with gas fees continuing to rise (in some cases north of $15 on average per transaction), the utility of ETH will be called into question by those seeking alternative blockchains to transact and do business – not memes – on.

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