Just after the launch of the London Hardfork Upgrade barely 24 hours ago, a total of 4,160 ETH, which at the current price of $2,800 per coin, puts the dollar value at approximately $11.65 million worth of Ether has been burned on the Ethereum network.
The London Hardfork Upgrade went live yesterday at exactly 13:33 pm Nigerian time and so far, the Ethereum network is burning Ether at a rate of 2.89 ETH per minute which in dollar terms translates to over $8,000 burned per minute so far, through the new transaction fee mechanism introduced in Ethereum’s London upgrade. This means per hour, we have a total of 174 ETH or $487,000 burned.
Token Burns, in terms of cryptocurrency, refers to sending an otherwise usable token (or fraction thereof) to an unusable account. The act of burning effectively removes tokens from the available supply, increasing its relative scarcity thereby making the token deflationary.
The highly anticipated London hard fork is ushering in the EIP-1559 upgrade that is intended to battle the high gas fees plaguing the network. Part of that adjustment introduced a mechanism that burns some of the base fees collected making Ether a deflationary token like Binance’s BNB.
An alternative to Etherscan called “Ultrasound money” reports that the popular NFT marketplace OpenSea is the top ETH burner with 495 ETH, or just over $1.39 million, destroyed since the upgrade was launched. A close second is the popular Uniswap decentralized finance platform, which has burned a total of 317 ETH or $921,000 so far, as of the time of writing this report
What they are saying
Uniswap founder, Hayden Adams, commented on the burn rate stating that if things continue at the same rate, the protocol could burn as much as 350,000 ETH or almost $1 billion per year. He tweeted, “It’s been 2 hours since the launch of EIP-1559 @Uniswap (v2+v3) is doing its part burning ~80 ETH so far. ❤️❤️ At this rate, Uniswap alone is burning 350,000 ETH – close to $1b worth – per year. Congrats to everyone who made EIP-1559 happen. Huge win for Ethereum.”
Bottomline
Many experts like “Bankless DeFi” in its newsletter, predicted that at current burn rates, “Annualizing these figures, this means that between 800,000 to 2.4 million ETH is projected to be burned in 2021.” When combined with the reduction in block reward issuance from the merge to proof-of-stake, the fee burning could lead to Ethereum having a deflationary supply, which would see it fulfil the increasingly used meme of “ultrasound money.”