More than $5 billion worth of Ethereum has been burned since the August 2021 upgrade…Details here
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Answer More than $5 billion worth of Ethereum has been burned since the August 2021 upgrade…Details here
The Ethereum Upgrade and Improvement Protocol (EIP) 1559 was an essential part of the “London” upgrade that was launched on August 4, 2021, which is one of the most important and prominent Ethereum upgrades towards its transformation into Ethereum 2.0.
The primary objective of this particular upgrade is to stabilize the high gas fees that arise from the scalability issues associated with Ethereum’s Proof of Work (POW) mechanism.
This was seen as a way to solidify the value of the original coins of the Ethereum ecosystem and to help combat the inflation rate associated with rewards for miners.
Since the implementation of the EIP-1559 upgrade in August 2021, approximately 1,959,407 ETH has been burned in base fees, worth over $5 billion at the exchange rate recorded at the beginning of March 2022.
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What this means is that over 1.9 million Ethereum coins have been permanently removed from the circulating supply.
Ethereum burn rate exceeds 500% in six months:
On September 15, 2021, the total number of ETH torched was around 297,000 ETH.
The total number of coins burned increased by 559% from then to March 2022.
Since coin burning is largely associated with fees, much of this number is largely due to increased demand for non-fungible tokens (NFTs) such as:
CryptoPunks and Bored Ape Yacht Club and for using Ethereum in decentralized exchanges such as Uniswap and SushiSwap.
EIP-1559 is heading towards its intended goal:
The primary goal of the EIP-1559 program after its launch was to burn 2,560,000 ETH within one year (August 2021 to August 2022).
The difference between the total number to be burned and the total number actually burned so far is over 600,000 ETH.
This means that approximately 76% of the cryptocurrency expected to be burned has already been burned with approximately 24% remaining to be burned on or before the end of August 2022.
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It is worth noting that the burning mechanism has become approved by many other crypto projects, which indirectly aim to maintain the price of the digital currency and to maintain its deflation rate.
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