ETH Supply Removal

Definition ∞ ETH supply removal refers to mechanisms that permanently take Ether tokens out of circulation, primarily through the burning of transaction fees introduced by Ethereum Improvement Proposal 1559 (EIP-1559). This process reduces the total available supply of Ether over time, making it a deflationary or disinflationary asset depending on network activity. The amount of ETH removed directly correlates with network usage and transaction demand.
Context ∞ The concept of ETH supply removal is a significant discussion point in news related to Ethereum’s economic model and its potential as a store of value. The ongoing reduction in Ether’s supply is a key factor analysts consider when assessing its long-term price trajectory. Reports frequently track the cumulative amount of ETH burned, providing a real-time indicator of network activity and its deflationary pressure on the asset.