The Impact of Muir Glacier Hardfork on Ethereum’s Inflation Rate

According to crypto disclosure platform Xangle, Ethereum’s inflation rate rose from around 3.88% to 4.36% after the network’s implementation of its Muir Glacier hardfork on January 2, 2020. The rise in inflation can be interpreted as a creation of additional Ethereum tokens.
Xangle’s on-chain Ethereum stats over the last 7 days shows that the annual inflation is 3.88%. Today, on January 6, the inflation rate shows 4.36%.
Ethereum’s inflation rate rose after the Muir Glacier incident that caused a 25% reduction in ETH block time. Xangle’s data shows that Ethereum block time was 13.24s over the past 24 hours compared to 14.83s over the past 7 days. Bitcoinist, a media platform that specializes in cryptocurrency, also stated that “Ethereum block time was reduced by 25% after Muir Glacier Hardfork, which could lead to a maximum of 25% increase in Ethereum supply.” Bitcoinists’ report was confirmed by Xangle’s on-chain records.

Ethereum is soon to release “Ethereum 2.0” that will reshape its consensus from PoW to PoS. Ethereum proposed a “difficulty bomb” in order to prevent the use of PoW but was compelled to postpone its plan due to the delay of Ethereum 2.0. Experts predicted that if the Muir Glacier did not exist, the block time would have increased from 10s to 20~30s.

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