$ 2 billion worth of Ethereum could have been thrown on the market, but thanks to EIP-1559 it was burned
Due to the rapid growth of the cryptocurrency market and the popularity of the NFT and DeFi industries, the Ethereum network reaches another milestone: more than $2 billion worth of Ethereum has been burned recently. The significant USD value of the burnt tokens is also followed by a recent price increase of 15%.
Ethereum burn rate
With the implementation of the EIP-1559 update, the fee-burning mechanism has been introduced to the network. Since then, Ethereum’s mining rewards have been burnt instead of going straight into the pockets of miners.
With network load increasing due to the popularity of the DeFi and NFT industries, the burning rate is moving up gradually with 616,000 Ethereum burned while a little bit over one million ETH have been minted.
At the current rate, Ethereum’s burn rate remains at 0.58 with more Ethereum being burned than gained by miners. If the network remains in the same condition until around the year 2023, Ethereum will become a deflationary coin, which means that the circulating supply will start to decrease progressively.
Effect on price
While deflationary blocs are not something new, various fund managers and high net worth investors have expressed their feelings about the coin’s future by predicting that it will continue to grow due to the constantly shrinking supply.
At press time, Ethereum is trading at $4,145, after reaching the previous ATH of $4,380 on Oct. 21. Cryptocurrency traders and investors have yet to break past the previous high, leaving it near the local high.
