​'$4.6 Billion in Ethereum Up in Flames' (here's why this is actually a good thing):

$4.6B ETH gone, and this is somehow a good thing?

Yup! Here's why:

Back in 2021, the "Ethereum Improvement Proposal 1559" (or EIP-1559, if you want to be cute about it) was launched.

What it meant was, a little bit of ETH would be burned (or destroyed) each time a transaction was made on the network.

The idea being:

As Ethereum grew → so would the number of transactions and (at a certain point) more ETH would be burned per year than created.

Making it scarcer / more valuable over time (aka a deflationary currency).

Since EIP-1159 launched, a total of 2.8 million ETH has been removed from circulation (or ~$4.6B USD worth).

...cool, so where does that leave us?

Well, supply growth has now dropped to -1.06% per year since EIP-1559 launched.

Making Ethereum more deflationary than Bitcoin.

(Wild!)

Here's the takeaway:

Ethereum is in many ways the 'operating system of Web3.' A lot of stuff is built on top of it - the same way many apps are built on iOS.

So, theoretically, the growth of Web3 should correlate to an increase in ETH's price.

(But that's assuming no other blockchains come along and steal the attention of users and developers alike).