According to Coingape reported on December 24, developers of the Ethereum Foundation have confirmed that a hard fork scheduled for January 1 will increase the inflation rate of ETH. Increased inflation (or supply) is expected to further depress the price of ETH. However, it is possible that the negative effects have already been digested.
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Due to the increased difficulty of Ethereum hashing, a hard fork must be performed before the network cold runs. The delayed release of Ethereum 2.0 caused a lot of difficulties for the network.
The Ethereum daily block reward has been reduced to below 10,000 ETH. The normal daily reward is around 12000-13000 ETH.
Udi Werthemier is a Bitcoin coder and the one who has criticized management the most and emphasized the disturbing state of the network.
Even more frightening is that the core developers of Ethereum simply "forgot" or "miscalculated" the schedule. Péter Szilágyi, another project leader at Ethereum, tweeted:
"No one has forgotten the ice age. Some people have made some rough calculations and think that time is still abundant. But the calculations are wrong. Developers obviously have more important things to do than double checks. When someone Realizing that the ice age is here, we will take action as soon as possible. "
The hard fork will again adjust the block production time to "normal"
His criticism was not welcomed by the Ethereum community. However, they did not deny the premise of the attack, and Iuri Matis, a programmer for the project, responded to Werthemier:
"Listening to you, it's as if a hard fork to increase inflation is the goal we set, but in fact it just restores the block production time to 'normal'. Yes, technically, faster block production Time (when it returns to normal) means higher inflation, but this is not the goal of this hard fork. "
Ethereum's current block production time has increased by 30% since October. Ideally, this would be a bullish signal for ETH.
Ethereum block time diagram (Source: Etherscan )
Usually, this is a normal update of the network. But in the current situation, it could cause ETH to fall below $ 100.
Despite the decline in ETH supply, its price has fallen below the support level. The sale could also be attributed to the "PlusToken" scam, which also led to a drop in Bitcoin.
A shock from supply is expected to increase daily selling pressure by about $ 300,000 in early January. In addition, after the hard fork event, supply is about to increase by about 20%, which has caused strong selling pressure.
Criticism of the hard fork has also greatly reduced the credibility of developers. In addition, with more hard forks and updates planned for this year, the risks surrounding Ethereum 2.0 are huge.