Ethereum to become a deflationary asset? EIP-1559
Can anybody provide more insight on this being potentially true? Trying to get a better understanding of EIP-1559.
Link here for GitHub page: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md
The page called this out at the end that got me thinking about the potential for ETH to be deflationary in the long run:
ETH Burn Precludes Fixed Supply
By burning the base fee, we can no longer guarantee a fixed token supply. This could result in economic instability as the long term supply of ETH will no longer be constant over time. While a valid concern, it is difficult to quantify how much of an impact this will have. If more is burned on base fee than is generated in mining rewards then ETH will be deflationary and if more is generated in mining rewards than is burned then ETH will be inflationary. Since we cannot control user demand for block space, we cannot assert at the moment whether ETH will end up inflationary or deflationary, so this change causes the core developers to lose some control over Ethereum's long term monetary policy.