Nevertheless, it remains remarkable that more Ethereum has been destroyed than created in recent days. If this continues, it can only have a positive effect on the price in the long term. This also makes discontinuing Ethereum even more interesting.
With the staking of Ethereum, on the one hand you get an interest, while on the other hand you are now earning because the total number of tokens decreases. For example, if the interest rate is 4 percent per year and the number of tokens falls by 3 percent, then you effectively have a return of 7 percent.
How is this possible?
The big question, of course, is how it is that suddenly more Ethereum is being destroyed than created. The answer to that question lies in the gas costs, the transaction costs on Ethereum. If you want to make a transaction on the Ethereum network, you have to pay gas costs. They are currently “extremely” high, due to a project called XEN Crypto.
More than 40 percent of the gas costs are accounted for by this project. Within the Ethereum network, part of the gas costs are burned at the stake. The higher the total gas cost, the more tokens will go towards the stakes. Now that number is so high that less Ethereum is made than is destroyed.