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Ethereum (ETH) has surprisingly reached a significant milestone that reflects the vision of its co-founder Vitalik Buterin. The circulating supply of Ethereum has fallen below a crucial threshold originally proposed in Ethereum Improvement Proposal 960 (EIP-960). Buterin’s unaccepted proposal aimed to create a fixed cap of 120,024,432 ETH to induce scarcity and potentially increase its value. The Ethereum community had rejected this proposal.
The Evolution of Ethereum’s Supply Policy
Presented in 2018, EIP-960 proposed a fixed supply to ensure economic sustainability under various conditions. The Ethereum community preferred a flexible supply policy that adapts to the changing needs of the network.
However, the current supply of Ethereum falling below the proposed cap is a result of the transition to a proof-of-stake (PoS) consensus mechanism and the integration of EIP-1559. The latter introduced a fee-burning mechanism that reduced the overall supply, inadvertently aligning with Buterin’s vision of scarcity.
Analysis of Ethereum’s Market Performance
Ethereum’s price is currently above multiple moving averages, indicating an upward trend. The 50-day moving average (MA) stands above the 100-day and 200-day MAs, which is a positive sign in market commentary. Significant trading volume indicates strong market interest supporting ongoing price movements.
Ethereum has encountered resistance at higher levels. However, it found support at the lower end, indicating a potential consolidation phase. A key indicator, the Relative Strength Index (RSI), shows a moderate range, pointing to a balanced market without sudden pressure towards overbuying or overselling.
The dual development of Ethereum surpassing Buterin’s proposed cap and exhibiting a bullish market trend marks a significant milestone in Ethereum’s journey, showcasing both its technological evolution and alignment with the founder’s initial vision. As Ethereum continues its transition, market participants are eager to witness the value of the cryptocurrency Ethereum and its impact on the broader crypto environment.
With this significant development, while scarcity has become a reality for Ethereum’s supply, the price of ETH is trading at $2,243.
