December 4, 2021

More than 1 million ETH worth $ 4.2 billion has been burned in the past 16 weeks

More than 1 million ETH worth $ 4.2 billion has been burned in the past 16 weeks

According to the WatchTheBurn website, more than 1 million Ether tokens with a total value of about $ 4.2 billion have been destroyed since the activation of the commission burn mechanism on the Ethereum network (EIP-1559).

16 weeks ago, there was a significant system-widethe update of the Ethereum network - London, within the framework of which the cryptocurrency inflation reduction protocol was launched. He began to divide transaction fees into two parts: basic and priority. The first is necessary for processing the transaction by the blockchain, and the second is an additional markup to attract the attention of miners.

The EIP-1559 mechanism began to destroy the entire basecommission, thereby slowing down the growth rate of the number of tokens (their relative depreciation), and simplified the assessment of the real amount of commissions still received by miners. While this initially led to a drop in their income, the changes are now beginning to have a positive effect. Currently, the ratio of the price of Ether (ETH) to Bitcoin (BTC) has reached its highest level since August.

Despite the fact that every minute on average7.67 tokens are burned, and since the London hardfork, more than a million of them have been withdrawn from the network, Ethereum is still subject to inflation. Given the current pace, about 4 million ETH can be destroyed in a year with an issue of 5.4 million ETH. The situation should change in the second version of the platform with the transition from the Proof-of-Work algorithm to the Proof-of-Stake consensus. Staking will make Ethereum's economy deflationary.

Nevertheless, even now, in some periods, the network burns more ether than it creates.

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