Ethereum has officially burned over two million ETH through the EIP-1559 upgrade implemented last year.
The largest on-chain gas burner on the Ethereum network is the major NFT marketplace OpenSea, followed by ETH transfers. Other gas gauges include Uniswap, StrongBlock, Tether, etc.
ethereum burning
According to the latest data from Watch the Burn, the Ethereum network has destroyed more than 2 million ETH, which means that around $6 billion was removed from circulation for the second largest cryptocurrency forever.
Ethereum Improvement Proposal (EIP) 1559 is arguably one of the most popular upgrades on the second largest blockchain. The fee burning proposal that triggered the deflationary effect was implemented last summer as part of the London Hard Fork. Ethereum first issued a net-negative in early September.
A significant portion has been removed from Ethereum over the past seven months. EIP-1559 split the transaction fees on the network, which were previously directed at a base fee and tips to miners. While the base fee is destroyed, the tip goes to the miners.
Over 344k ETH or about $1 million was distributed as tips to miners on the Ethereum network.
What will happen next?
Ethereum’s transition to a proof-of-stake (PoS) network is a step that has taken many years in the making. Last week, the network was merged into the kiln testnet. This is where the “merge” is due to take place in the second quarter of this year, and it is also expected to be the last testnet before the final changes to the consensus mechanism.
After the “merge”, the current PoW consensus mechanism will be completely removed, and all blocks on the blockchain will be created through PoS. The move will help Ethereum move away from the environmental controversy surrounding bitcoin.
According to the latest data, over 10 million ETH have been staked on the Ethereum 2.0 deposit contract, which was valued at over $29 billion at the time of writing. Locked Ether removes the amount of freely traded ETH from the market and reduces its circulating supply.
Once the merge starts, the issuance of ETH per block will also decrease, adding further pressure to the supply. While the deflationary aspect of Ethereum did not have a profound effect on pricing, many experts believe that the merger will act as a major catalyst.
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