Ethereum's network activity soars, processing 2 million transactions in a day as Ether burn rate intensifies.
The Ethereum network has been buzzing with activity, setting a new benchmark in its operational capacity. On January 14th, the network's throughput hit a record high, processing an impressive 22.7 transactions per second. This spike in activity translated to nearly 2 million transactions within a 24-hour period, showcasing the robustness and scalability that Ethereum has achieved.
Throughput refers to the number of transactions a blockchain network can handle per second. A higher throughput indicates a more efficient network capable of supporting more users and transactions. Ethereum's recent throughput peak is a significant indicator of the network's growing adoption and utility.
Alongside this surge in network activity, Ethereum has experienced a high burn rate of its native cryptocurrency, Ether (ETH). The burn rate is a mechanism that permanently removes a portion of the cryptocurrency from circulation. This process has led to a decrease in the available supply of ETH, hitting new lows since the implementation of the Ethereum blockchain's major upgrade known as 'The Merge' in September 2022.
The Merge was a significant milestone for Ethereum, transitioning its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS). This change has dramatically reduced Ether issuance by about 90%, paving the way for ETH to potentially become a deflationary asset. Over the past week, the supply of ETH decreased by 5,745.5 ETH, bringing the total to approximately 120.76 million coins. Notably, Uniswap has been the leading platform for Ether burns.
As network transactions reached a multi-year high, the price of Ether responded positively, with a near 2% increase in the past 24 hours. The daily transaction count on Ethereum has also seen a significant rise, with the seven-day moving average climbing from 1.1 million to 1.3 million transactions. This level of activity has not been observed since November 2021, when Ether's price soared to its all-time high.
The economic throughput, which represents the total value transacted on the network, has followed suit. In just one week, the economic throughput of ETH on Ethereum jumped from $2.8 billion to over $4 billion, indicating not only a higher quantity of transactions but also a greater overall value being transferred across the network.
For users of the Ethereum network, the increased throughput and reduced supply of ETH may lead to a more efficient experience with potentially lower transaction fees and faster processing times. Investors might view these developments as positive signs of Ethereum's maturing ecosystem and the growing demand for ETH. As the network continues to evolve with upgrades like The Merge, Ethereum is solidifying its position as a leading platform for decentralized applications and finance.
