Over $1 billion worth of Ethereum (ETH) now burned after EIP-1559 update

Nearly six weeks after the implementation of the highly hyped Ethereum London upgrade, a colossal amount of ETH has been burned on the network.

$1 billion Ether burned

Data from Watchtheburn confirmed this with figures, as it indicated that since the activation of London Hard Fork on August 5, over 297,000 ETH, worth more than $1 billion, had been burned on the network.

The London Hard Fork improved the transaction fee of the second largest crypto asset by market cap as it introduced a new burning mechanism to simplify the process. This new burning mechanism requires users to pay a base fee to initiate a transaction. The base fee would be burned, and miners would receive part of it as a tip.

This new burning mechanism introduced by the London Hard Fork has been effective as a deflationary tool, reducing the network’s inflation rate.

Initially, Ethereum miners would receive about 13,000 ETH produced daily; however, the new mechanism has been able to fight this, reducing the ETH produced daily and increasing the ETH burned. Currently, ETH burned has overtaken the amount produced daily.

One of the reasons attributed to the increased ETH burned is the existing high transaction fees on the network, accounted for by the growing demand on the network, coming from the burgeoning niche, NFT that is the trend now. Daily on the network, the second-largest blockchain handles not less than 1.2 million transactions.

While the ETH burned has been less this week, the amount that would be burnt in two months, or in the next six months, and even a year would be unimaginable. If the burning continues at this rate until the next six months, the total ETH burned would reach 1,783,000 and 3,564,000 in the next year.

However, as second-layer solutions like Arbitrum and Optimism begin to see more usage, it could be able to free up some room on the main blockchain, which could help to reduce the activity on ETH blockchain, otherwise, it would just be adding to the activity on the network.

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