Since early August when the EIP-1559 became effective, Ethereum’s network has been constantly burning ETH. A portion of the fees have been continually burned since then. This has taken a significant amount of digital assets out of circulation. To combat inflation in Ethereum, this hard fork was made. Since then, countless blocks of Ethereum have experienced deflation since the hardfork.
1 Billion USD ETH burned clocks
As fees have increased, so has the amount of ETH that is being burned. The increased network usage has caused transaction costs to rise on Ethereum. Since EIP-1559, which burns a third all fees to generate ETH from circulation, a greater volume of ETH is being constantly removed. It had quickly risen to 1 million ETH and then to 10 million. Finally, 100 million was reached, and the community began looking towards the billion mark.
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This number was reached by Ethereum on Wednesday, when 1 billion ETH were burned. This number was reached in just three months. As the amount of ETH being burned on the network increases, it could take less time for the two billion mark to reach.
The total amount of ETH that has been burned at the current ETH prices is more than $4.2 billion. All this volume, prior to EIP-1559 would have been in circulation. This increased the amount of circulating ETH and contributed to the inflationary nature ETH. Ethereum now faces a deflationary future, thanks to the fire.
The Impact of Ethereum Burn
While Ethereum may not be fully deflationary in the long-term, it has seen the impact of the ETH fire spread across the network. A few interesting statistics show that the amount of ETH put into circulation for each block mined has decreased significantly. The net decrease has been as much as 67.16% since the hard fork.
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In line with net loss, net issuance is also down. As of the writing, the net Ethereum network issuance is 490,400. 1493,739 ETH has been rewarded, which is a little more than $6.3 billion. Tips on the network are doing well with more than 200,000 tips so far. This totals $846 million.
What Price has done in Contrast
Ethereum’s price has done tremendously well since the burn began. In August, Ethereum has seen multiple highs. It is now close to the $5,000 threshold. While the cryptocurrency market has taken some beatings, the digital asset is still above $4,000 despite the bears’ attempts to bring it down.
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Even when the market has been struggling, indicator have maintained their bullish outlook. Propelled by DeFi’s growth, analysts have estimated that the cryptocurrency will be worth $5,000 per year. Ethereum is showing great promise to hit this price before 2021, as investors continue to flock to this blockchain-based industry.
Featured image taken from Genesis Block Chart from TradingView.com