Grayscale Named Ethereum Price Growth Condition
Grayscale named Ethereum price growth condition
The cryptocurrency fund believes that improving the network protocol can significantly increase the value of the asset.
Institutional cryptocurrency fund Grayscale Investments believes that the introduction of a new fee mechanism could create positive dynamics for ETH price if its network activity continues to grow. This proposal could result in ether being burned at a rate faster than the creation of new coins, which will change the supply and demand dynamics underlying the Ethereum markets.
Grayscale has published a report looking at a proposal to improve the cryptocurrency protocol. It supports the introduction of a “base commission” that will be burned when transactions are executed along with the fees miners receive.
The “base commission” will depend on whether the network exceeds the bandwidth by 50%, which makes it possible to better predict price fluctuations for the network’s internal token gas and will make ether the only economic unit of the network. If the burning of ether to pay for transactions occurs more often than the release of new coins, this will positively affect the value of the cryptocurrency, we are confident in Grayscale.
“If activity increases and the supply of ether decreases due to combustion, the supply and demand curve will indicate an increase in the price of a unit of ether because each unit will have to satisfy most of the economic activity. If the EIP-1559 improvement is implemented, it will create a new mechanism that should serve as a positive factor in the growth of the price of ether,” – says Grayscale.
As of February 4, the average commission on the Ether network is $ 20. This applies to both sending cryptocurrency from one address to another, and more expensive operations, including, for example, the signing of smart contracts.
Read actual crypto news and forecasts every day on https://news.bitxmi.com/
Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.