111 days ago, the Ethereum network implemented the London hard fork upgrade which added a mechanism (EIP-1559) that changed Ethereum’s fee rate to a new scheme that makes the crypto asset ether deflationary. Since then, 1 million ether has been burned, the equivalent of about $ 3.8 billion of ethereum using today’s exchange rates.
Over a Million Ether or $3.8 Billion Burned to Date
The second-largest crypto asset in terms of market capitalization, ethereum (ETH) has an overall valuation today just above $500 billion. Ethereum’s market cap represents 18.8% of the $ 2.7 trillion crypto economy. Three months ago, on August 5, 2021, the Ethereum blockchain upgraded and added various features to the consensus rules. Most transformers included EIP-1559 and EIP-3554, and EIP-1559 in particular have created a new fee rate schedule that allows the grid to burn off some of the ether.
EIP-1559’s summary hosted on Github states:
There is a base fee per gas in protocol, which can move up or down each block according to a formula which is a function of gas used in parent block and gas target (block gas limit divided by elasticity multiplier) of parent block. The algorithm causes the base charge per gas to increase when the blocks are above the gas target and decrease when the blocks are below the gas target. The basic tariff per gas is burned.
Since the new feature was introduced, metrics from Dune Analytics indicate 1,001,212 ether or $3.8 billion worth of ethereum using today’s exchange rates has been burned.
At the time of writing, the etherscan.io API which shows the ETH supply in circulation states that there are 118,472,428 ethers today. The biggest ethereum burner today is still the non-fungible token (NFT) marketplace Opensea with 110,081 ether or $398 million burned to date.
Combustion resulting from the use of OpenSea has occurred over 7,941,975 ethereum transfers. Regular Ethereum transfers are tied to 94,800 ETH burnt since the August upgrade. The decentralized exchange (dex) platform Uniswap V2 (version 2) is the third-largest ethereum burner since the upgrade. 92,239 ether or $373 million worth of ethereum using today’s exchange rates has been burned stemming from Uniswap V2 usage.
The stablecoins tie (USDT) and the usd coin (USDC) also contribute a lot of ethereum burning. While tether (USDT) is the fourth largest burner behind Uniswap V2, USDC is the seventh-largest ethereum burner today. Tether out of 11,499,787 transfers attributed to 53,988 burnt ethers or $ 210 million. USDC has contributed to the combustion of 20,042 ethers today, or $ 77 million. Other applications like Metamask, 1inch, Sushiswap, and Axie Infinity also contribute to a lot of ether burning.
