Early in August, the London hard fork added EIP-1559, a mechanism for burning a portion of transaction fees. According to the Ultrasound, 1,008,431 ETH have been burned since then.
At today’s pricing of roughly $4,300, that amounts to a staggering $4.3 billion. In mid-September, Ethereum surpassed the $1 billion burnt mark.
Ethereum supporters celebrated the milestone on social media, while individuals who use the network on layer 1 continue to pay exorbitant transaction costs.
The current daily burn rate is 11,588 ETH, which is almost $50 million. The network has burned 8 ETH every minute on average over the last 24 hours. At these rates, the network will consume around 4.2 million ETH each year, or $18 billion at current pricing.
Uniswap is currently leading the burn table, having destroyed 1,360 ETH ($5.8 million) in the last 24 hours. It’s not unexpected, given that a single token swap on the DEX can already cost up to $100 in gas fees.
Bonus for deflation
Because there are presently 5.4 million ETH mined every year, the burn rate indicates that Ethereum supply inflation has been lowered to just 1% per year.
Over the last few months, the network has switched to a deflationary issuance multiple times as more ETH was burned than produced.
The issuance is predicted to become entirely deflationary after “the merging” occurs in the early half of 2022. Per the simulation, Ethereum issuance will fall by -3.2% every year, implying that the supply will decrease.
When the current ETH 1.0 chain merges or “docks” with the ETH 2.0 Beacon Chain, proof-of-work will be phased out and proof-of-stake will take its place.
Before then, the Ethereum difficulty bomb will be extended with the Arrow Glacier update, which will be released early next month.
New ETH 2.0
According to Beaconcha.in, the Beacon Chain has roughly 8.37 million ETH invested. This is worth about $36 billion and represents 7% of the total supply.
Stakers can make roughly 5.2% annually in what is soon to be a deflationary asset.
As per CoinGecko, the price of ETH is currently $4,287. The asset has lost 13% since its peak of $4,878 on Nov. 10.
Image courtesy of Cointelegraph News/YouTube
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