Ethereum price climbs as EIP-1559’s deflationary effects shine
Increasing NFT-related activity on OpenSea has seen a little over US$1 billion worth of ETH being burned over the course of January alone.
- Ethereum's market dominance index (DI) has once again risen to 18% after having slipped as low as 16% recently.
- Blockchain solutions provider ConsenSys acquired ETH wallet service MyCrypto earlier this week.
- SEC Commissioner Hester Peirce claims that a proposed "definition change" by the regulatory body could have a serious effect on DeFi companies in the near term.
Staying in line with the rest of the market, Ethereum – the world's second-largest cryptocurrency by total market capitalisation – has proceeded to surge by a whopping 13% over the past week, bringing its day trade value to AUD$3,904 after having slipped as low as AUD$3,250 on 28 January.
This latest ascent coincides with news of US$1 billion worth of ETH being burned over the last 30 days. In this regard, data made available by Nansen Analytics shows that the altcoin has been on its path of "circulatory depletion" since the introduction of EIP-1559 in August last year. As a quick refresher, the aforementioned EIP was designed to help burn a portion of fees associated with every ETH transaction.
That said, Ethereum is still largely an inflationary ecosystem, such that the number of ETH being issued annually (5.4 million tokens) still outweighs the number of coins burned per year (3.5 million tokens). Additionally, ETH's supply is all set to peak once it makes its long-awaited transition from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) one later this year.
ConsenSys acquires major ETH wallet provider
ConsenSys, a firm founded by Ethereum co-founder Joseph Lubin, revealed earlier this week that his company had proceeded to buy out MyCrypto, an Ethereum wallet service – adding to its ever-growing suite of crypto-centric products.
The idea behind the move is to merge the offering with Consensys' MetaMask wallet, so as to help "improve the security" of all its existing products and thereby devise a cohesive interface that spans "desktops, mobile phones, app extensions and even browser wallets". At press time, MetaMask boasts of a client base of over 21 million active users and is by far the fastest-growing, non-custodial Ethereum wallet in the market today.
SEC's proposed guidelines a threat to the DeFi market?
US SEC commissioner Hester Peirce – lovingly referred to as "crypto mom" by investors across the globe – warned that an upcoming rule change proposed by the regulatory body could have a major adverse impact on firms dealing with the decentralised finance (DeFi) sector.
Peirce pointed out that the upcoming amendment proposed by the SEC could change the definition of what an "exchange" is, thus having far reaching consequences on the DeFi market as a whole. On the subject, she added:
"The proposal includes very expansive language which, together with the chair's apparent interest in regulating all things crypto, suggests that it could be used to regulate crypto platforms. The proposal could reach more types of trading mechanisms, including potentially DeFi protocols."
Disclosure: The author owns a range of cryptocurrencies at the time of writing.