The theoretical deflationary properties of Ethereum’s London upgrade last week have already been seen in action on the blockchain, with almost 800 “deflationary blocks” produced.
A spike in the Ethereum transaction fee burn rate has resulted in at least two hours when the supply was deflationary. The network has come under heavy load over the past couple of days, which has resulted in a lot more gas being burnt.
As of 22:00 UTC, ETH Burn Bot recorded an instance when 545 Ether (ETH) was burned within a one-hour period. With Ethereum issuance reported at 532 ETH per hour, it resulted in the asset seeing deflation of minus 13 ETH for that brief period.
A larger deflationary burn was detected by ETH Burn Bot a couple of hours later, in which 945 tokens were burned within the hour resulting in a temporary negative issuance of -417 ETH. It calculated this as an annualized deflation rate of -3.12%.
945.1184 $ETH burned last hour.
Issuance: 528.0000 ETH
Net Change: -417.1184 ETH
2021-08-10 22:00-23:00 UTC
Last Block: 13000300
Cumulative : 24,942.1282 ETH
— ETH Burn Bot (@ethburnbot) August 10, 2021
When the amount of ETH burned is greater than the mining reward, deflationary blocks are produced and the supply temporarily decreases. This has been observed on a tracker from advisory firm Carbono, which is currently reporting that there have been 791 deflationary blocks so far and defines them as blocks where the burned fee exceeded the mined ETH.