According to data from Ultrasound Money, an Ethereum network tracker, after 152 days since the implementation of the EIP-1559 proposal, which gave the Ethereum blockchain deflationary functionalities and the ability to burn gas fees, the network now burns an average of 6.18 ETH per minute, which at today’s price of $3,800 per ETH, puts the burn rate at $23,484 per minute.
So far, the Ethereum blockchain has burned a total of 1,362,500 ETH which at today’s price, puts the total burn so far at approximately $5.18 billion as of the time of this report.
The Ethereum network is transitioning from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) and the network has been going through a series of hardfork updates to that effect.
A hardfork 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.
The London hard fork was one of the upgrades 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 give 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.
What you should know
According to Ultrasound Money, since being activated 152 days ago, OpenSea, the popular Ethereum network NFT marketplace and the world’s biggest NFT marketplace, accounts for the most burns on the network which represents approximately 145,700 ETH which is equivalent to approximately $553.7 million. This accounts for 10.69% of the total burns.
Asides from OpenSea, ETH transfers account for 132,760 ETH or approximately $504.5 million and Uniswap V2 accounts for 114,560 ETH or approximately $435.3 million come in at second and third respectively.
The popular play-to-earn platform, Axie Infinity, takes the 8th spot, accounting for 16,915 ETH burned or approximately $64.3 million.
At the moment, the Ethereum blockchain is burning about 8.97 ETH per day which is $34,086 using the current market price of Ether. This means the total average is expected to increase in the future.
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 reducing the amount of energy needed to execute transactions on the network as the PoS is known to consume far less energy than the PoW.