Definition ∞ ETH Monetary Policy refers to the rules and mechanisms governing the supply and issuance of Ether, the native cryptocurrency of the Ethereum network. This policy dictates how new ETH is created, how transaction fees are handled, and how these factors influence the total circulating supply. It directly impacts the asset’s scarcity and economic value.
Context ∞ Following Ethereum’s transition to Proof-of-Stake and the implementation of EIP-1559, ETH Monetary Policy has shifted towards a potentially deflationary model due to a portion of transaction fees being burned. Discussions often center on the long-term supply dynamics and their influence on ETH’s status as a store of value or a productive asset. A critical future development to watch is how subsequent protocol upgrades and network activity continue to refine and impact the overall supply schedule of Ether.
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