What Is The Triple Halving Of Ethereum?
Many cryptocurrencies like Bitcoin and Ethereum were made to stop money from getting worth less and less over time. In particular, Bitcoin uses a halving schedule. For every 210,000 blocks that are mined, a halving event happens, which cuts the rewards that miners get in half. The last halving happened in 2020, and the miner’s reward went down to $6.25. The next Bitcoin halving is expected to happen in 2024. When it does, the miner’s reward will drop to 3.125 Bitcoin.
Explaining the Triple Halving of Ethereum
Nikhil says that the Ethereum Triple Halving is a financial flow analysis that simulates Bitcoin’s response to the halving event and predicts the price of Ethereum in January 2023. In 2021, Nikhil’s dissertation on triple halving came out. The successful Merge brought Ethereum back to life.
The Ethereum Triple Halving is a three-fold financial model of how the Ethereum supply goes down. The supply goes down in three ways: first, by giving miners less ETH, then by burning ETH through the protocol, and finally by staking.
Let’s go through each part and show how it fits into the Ethereum Triple Halving.
Issuance
The first step of the triple halving is giving ETH to miners. Before the Merge, about 4% of ETH was issued each year as an incentive for miners to validate the network. This could be thought of as paying people to keep the network running.
Burning
EIP1559 made the burning method the second pillar of triple halving. 70% of the network’s transaction fees were sent to an address that wasn’t being used (thus the supply will be deleted from circulation). More than 2 million ETH were burned. So, when the supply is burned, Ethereum’s supply goes down.
Staking
The PoS staking method is to put Ethereum in a smart contract for six to twelve months after the Merge.
Read More: Google Cloud Introduces Blockchain Node Engine for Ethereum Developers.
This staking feature is part of the triple halving because the way it is released prevents ETH from being dumped on the market. This creates a community of HODLers like the BTC HODLers. ETH staking increases the supply of ETH, which decreases volatility.
The graph shows that the amount of Ether staked is stable and high.
How Much Will Ethereum Cost When It Splits in Three?
First of all, it’s impossible to make accurate price predictions for cryptocurrencies. The person who wrote this hypothesis came up with a range of price goals. The best-case scenario prices are between $30,000 and $50,000, and the highest price goal is $150,000. Given how the market is right now, it seems unlikely that the price of Ethereum will go from $1,500 to $30,000. But because of Ethereum’s new economics, the price could easily go above $5,000 and pass previous highs, especially as investors stop speculating on a bull market.
