Does Burning Guarantee a Net Deflationary State for Ethereum?
No, burning does not guarantee a net deflationary state. Deflation only occurs if the amount of Ether burned from transaction fees exceeds the amount of new Ether issued to stakers as rewards within the same period.
If network usage is low, issuance will outpace burning, and the supply will remain inflationary.
Glossar
Net Deflationary State
Mechanism ⎊ A net deflationary state within cryptocurrency, options, and derivatives markets arises when systemic selling pressure, coupled with constrained supply ⎊ often through token burns, buybacks, or limited minting ⎊ exceeds demand, resulting in a sustained decrease in asset valuation.
Guarantee
Assurance ⎊ Within cryptocurrency derivatives and options trading, assurance represents a formalized commitment regarding the performance or outcome of a contract, extending beyond a mere promise.
Burning
Destruction ⎊ ⎊ In cryptocurrency, options, and derivatives, burning refers to the permanent removal of tokens from circulation, effectively reducing total supply.
Deflationary
Concept ⎊ A Deflationary asset exhibits a supply schedule where the total circulating quantity is designed to decrease over time, often through mechanisms like token burning or fixed caps.