The Ethereum network has been burning ETH since the EIP-1559 came into force at the beginning of August. Since then, some of the fees have been continuously burned, which has taken a large part of the digital asset out of circulation. This hard fork was implemented to combat the inflationary nature of Ethereum, and it was successful as countless blocks have been deflationary since the hard fork.
ETH burned 1 billion watches
The amount of ETH burned has increased along with the charges on the network. Increased network usage had caused transaction costs on Ethereum to skyrocket, and since EIP-1559 was implemented to burn a third of all fees, higher volumes of ETH have been withdrawn from circulation. The number had quickly reached 1 million ETH, then 10 million, and at 100 million the community had its eyes on the billion mark.
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Ethereum hit that number on Wednesday when the total number of ETH burned on the network exceeded 1 billion. It only took a little over three months to hit that number, and as the burn on the network increases, it may take even less to hit the 2 billion mark.
At the current ETH price, the total amount of ETH burned amounts to over 4.2 billion US dollars. Before EIP-1559, all of this volume would have been in circulation, increasing the amount of ETH circulating and adding to the inflationary nature of ETH. With the burn, however, Ethereum is headed for a truly deflationary future.
Effects of Ethereum Burn
While Ethereum is not entirely deflationary, the effects of the ETH burn have recently been scouring the network. Some interesting statistics show that the ETH per unit dismantled has decreased significantly. Since the hard fork, the net reduction has even been 67.16%.
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In addition, net sales also decreased in line with the net reduction. Net issuance on the Ethereum network is currently 490,400 at the time of this writing. 1,493,739 ETH rewards have been issued, which is a little over $ 6.3 billion. While the tips in the network have developed very well with so far over 200,000 ETH tips with a total value of 846 million US dollars.
How the price has developed in contrast
The price of Ethereum has done tremendously well since the burning began. Since August, the digital asset has hit several new highs and is about to test the $ 5,000 resistance point. The asset has since taken a downturn along with the rest of the crypto market, but it has held above $ 4,000 despite bears trying to bring the price down.
ETH recovers after slump | Source: ETHUSD on TradingView.com
The indicators have stayed bullish even if the market has not performed as well. Analysts have valued the digital asset at $ 5,000 by year-end, driven by DeFi’s growth. As more and more investors flock to the blockchain to take advantage of this new industry, Ethereum is showing great promise to hit that price before 2021 expires.
Featured image from Genesis Block, diagram from TradingView.com