Ethereum implemented the EIP-1559 in 2021 and since then, ETH has been burned every day. This upgrade has caused the network to become deflationary, taking over 30% that would have gone into circulation directly and burned it. Now, just seven months after the upgrade was implemented, the network has reached another milestone of ETH burning in terms of dollar value.
Over $5 Billion in ETH Burned
On August 5, the EIP-1559 officially came into effect. This came with much fanfare, given the implications of such an improvement on the network. Since then, the ETH has burned and accelerated in the coming months as network activity increased due to the rise of the decentralized financial space (DeFi). The burn quickly burned over $1 billion, and now seven months later, there are… burnt over $5 billion worth of ETH†
Related literature | Bitcoin Breaks Above $40K Again, But When Will Consolidation Stop?
This comes in light of the recent acceleration recorded over the past six months. In this time frame, the rate at which ETH is burned has increased by 559%. The volume burned all comes from fees as the network has seen more activity lately. The combustion is important because all burnt coins are permanently removed from circulation. This means that more than 1,950.00 ETH has been withdrawn from circulation since August 2021.
At this accelerated speed, the network sees about 80 ETH being burned every hour. This translates to over $200K of ETH being burned every hour. Combustion over the past seven months has since achieved a net reduction of 67%.
ETH drops to $2,500 | Source: ETHUSD on TradingView.com
Ethereum planned to burn 2.6 million ETH in its first year of deployment and at the current pace, it looks like the network will reach this milestone well before August 2022.
Ethereum on its way to consensus layer
Ethereum’s move to the consensus layer (previously called ETH 2.0) is getting closer by the day. The final merger is expected to happen sometime in mid-2022, leaving it just a few more months until the estimated launch time. This will take the network on a completely new path, making it more efficient, scalable and secure for all users of the blockchain.
Related literature | Yellen’s Positive Comments On Biden’s Crypto EO Push Bitcoin Past $41,000
Ethereum still remains the second largest cryptocurrency in the space by market cap. It is currently hovering around $2,500, a crucial fulcrum for the digital asset. Its market cap is $311 billion at the time of writing.
Featured image of CryptoPotato, chart from TradingView.com