In 2021, Ethereum introduced the EIP-1559 and ETH is being burned daily since. This has led to the network becoming deflationary. It took 30% more of what would normally have been in circulation and burnt it. The network now has another milestone, ETH burnt in dollars, just seven months after its upgrade.
Over $5 Billion In ETH Burned
The EIP-1559 was officially implemented on August 5. The EIP-1559 was officially implemented with great fanfare due to the positive implications it had for the network. The burn of ETH has continued since that time and accelerated in the months following the growth of DeFi (decentralized finance) activity. Seven months later, the amount of ETH lost has surpassed $1Billion.
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These numbers are due to the acceleration that has been observed in the last six-months. 559 percent more ETH has been burned in the same time period. As the network sees more activity, fees are responsible for all of its volume. It permanently takes all burned coins out of circulation. This is why the fire is so important. More than 1950,00 Ethereum have been taken out of circulation since August 2021.
The network now sees about 80 ETH per hour being burnt at this rapid rate. It means that more than $200K of Ethereum is being burnt every hour. In the past seven months, 67% of the total ETH burned has been reduced.
Source: ETHUSD on TradingView.com| Source: ETHUSD on TradingView.com
Ethereum had planned to burn 2.6 million ETH in its first year. At the rate that Ethereum is moving, this number will likely be reached before August 2022.
Ethereum heading towards Consensus Layer
Ethereum’s move to the consensus layer (previously referred to as ETH 2.0) is growing closer by the day. The last merge will occur in 2022. There are only few months left until launch. The network will be able to take a new route, which will make it safer, more efficient and scalable.
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Ethereum is still the market leader in cryptocurrency by market capital. It currently trades at around $2,500 which is a crucial support level for this digital asset. The market cap of the digital asset is currently $311 billion.
Featured image by CryptoPotato. Chart source: TradingView.com