ETH is becoming a deflationary asset. The number of ETH burned has been rising from year to year and it has reached a new all-time high of 360,000 (almost 1.3 billion US dollars) in November 2021.
This trend will have large impact on Ethereum’s growth as a deflationary asset because the supply of ETH will be tighter going forward. New users will have to buy from those who already hold ETH. The cost of purchasing ETH would rise as supply decreases and demand increases.
This is not the first time that Ethereum has burned coins to support its growth. The Ethereum Foundation continues to burn coins in order to reduce the total supply of ETH, which has been mostly used by speculators. This is a logical step for Ethereum because it will make it easier for new users to get into the network by decreasing the cost of acquiring ETH through mining or purchasing on exchanges.
Burning coins will also help with scalability because reducing the total number of tokens in circulation means that there are fewer transactions that need to be processed in each block, which will ultimately lead to faster transaction times.