$ETH
🤔🤔🤔is $ETH max supply infinity?🤔🤔🤔
Ethereum's maximum supply is indeed considered infinite, but that doesn't necessarily mean its supply will infinitely increase. Here's what's important to understand¹ ²:
- *Infinite Supply:* Ethereum doesn't have a hard cap on its total supply like Bitcoin does. New ETH is created through a process called mining or staking, and there's no theoretical limit to the amount of ETH that can exist.
- *Controlled Issuance:* However, the issuance rate of new ETH is controlled and has been adjusted over time. After transitioning to Proof-of-Stake (PoS), the network issues approximately 1,600 new ETH per day, which is significantly less than the pre-PoS era.
- *Burn Mechanism:* Additionally, Ethereum's EIP-1559 upgrade introduced a burn mechanism, where a portion of transaction fees is permanently removed from circulation. This can lead to a decrease in the total supply of ETH if the burn rate exceeds the issuance rate.
- *Current Supply:* The current circulating supply of Ethereum is around 120.4 million ETH, and it has been steadily increasing, albeit at a slower rate since the PoS transition.
The potential impact on Ethereum's supply and value is multifaceted³:
- *Scarcity and Value:* If demand for Ethereum transactions remains high, the burn mechanism could lead to a reduction in supply, potentially driving up the value of ETH.
- *Inflation Control:* The controlled issuance rate and burn mechanism help mitigate inflationary pressures, maintaining the purchasing power of ETH.
To summarize, while Ethereum's maximum supply is theoretically infinite, the controlled issuance rate and burn mechanism work together to manage the supply and potentially maintain the value of ETH.