It’s been two months since the London Hardfork upgrade went live on the Ethereum network and according to data from Ultrasound Money, the Ethereum network has burned approximately 503,000 Ether.
At Ether’s current price as of the time of this writing standing at $3,600, this puts the dollar figure at approximately $1.81 billion as of the time of this writing.
The Ethereum network burn rate has increased to 5.2 Ether per minute in October, a month that has seen Ethereum rally by approximately 20% so far.
The Hard fork upgrade
A hard fork occurs when there is a major alteration to the protocol of a blockchain network that results in a divergent split between the old protocol and the newer version. In a hard fork, miners must choose whether to continue validating the old blockchain or the new one.
The London hard fork is the latest upgrade and it incorporates five new Ethereum Improvement Proposals (EIPs), which are all temporary until the permanent Ethereum 2.0 update. One of the improvements is the EIP-1559 which is a proposal for the introduction of a ‘base fee’ that tracks gas fee prices across the entire Ethereum network in order to ensure accurate gas fee predictions for network users. It also gives the Ethereum network deflationary functionalities which gives the network the ability to burn gas fees.
Token Burns, in cryptocurrency terms, 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, thereby increasing its relative scarcity.
According to Ultrasound Money, an Ethereum network tracker, OpenSea, the popular Ethereum network NFT marketplace accounts for the most burns on the network which represents approximately 14.84% or 74,660 ETH. This is equivalent to approximately $269 million.
Asides from OpenSea, ETH transfers accounts for 44,130 ETH or approximately $159 million and Uniswap V2 accounts for 27,380 ETH or approximately $99 million to come in at second and third respectively. The popular play-to-earn platform, Axie Infinity, take the 6th spot, accounting for 12,580 ETH burned or approximately $45.3 million.
Bottomline
The London hard fork is a vital upgrade for the Ethereum network in its quest to move from a proof-of-work (PoW) network consensus to a proof-of-stake (PoS) network consensus which is aimed at saving the network from near-paralysis and reduces the amount of energy needed to execute transactions on the network as the PoS is known to consume far less energy than the PoW.