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28 October 2021
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Ethereum

Over $1B Worth of ETH Burned in the Aftermath of Ethereum’s London Upgrade

More than 300K ETH has been burned since Ethereum’s London upgrade introduced a new burning mechanism for transaction fees barely six weeks ago. 

Following the implementation of the long-anticipated Ethereum’s London hard fork on August 5, 2021, fresh data shows that more than a billion dollars worth of ETH has become unusable through a burn mechanism.

Over 300k ETH Burned

According to Dune Analytics, a total of 303,681.05 Ether, which is worth $1.032 billion at the time of writing, that was originally designed to be rewarded to miners as part of fees, has been burned in less than two months since the last network upgrade.

Many Ethereum users have complained about looming inflation as a result of the high fees miners are receiving for processing transactions on the network, prompting developers to add a burning mechanism.

With the implementation of the London hard fork, the inflation rate of Ethereum is gradually reducing, as miners are forced to part with some of the users’ fees known as base fees, which they would have originally kept for themselves.

Prior to this time, Ethereum miners minted as high as 13,000 ETH daily, which they received as rewards whenever they processed transactions on the network.

However, since the launch of Ethereum Improvement Protocol 1559 (EIP-1559), the burning mechanism has reduced that amount to about 6,000 ETH.

High Demand Keeping Miners Afloat

While it may come as a surprise to many why tons of ETH were burned in just over a month, the network has enjoyed an increasing demand recently.

Ethereum remains the favorite blockchain for non-fungible tokens (NFTs) and decentralized application (dApps) developers, with countless projects being unveiled on a day-to-day basis.

These activities have resulted in several transactions being carried out on the second-largest blockchain. Interestingly, data from Ycharts suggests that Ethereum daily transactions have remained as high as 1.2 million in the past week or so.

Ethereum Hashrate Sets New ATH

Despite the large volume of ETHs burned from miners’ fees, one would think there would be an exodus of miners from the network to similar projects.

However, miners have remained resilient and shown commitment to the network as transaction volume and ETH prices continue to surge.

Two days ago, CryptoPotato reported that the Ethereum hashrate reached a new all-time high (ATH) of 715.4 TH/s, which indicates stronger miners’ commitment to the second-largest cryptocurrency.

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