Ethereum has reached another milestone that is changing the shape of the coin today
The Ethereum network has reached a major milestone after burning the millionth coin on the blockchain since the implementation of the fee-burning mechanism presented in the EIP-1559 update.
The current Ethereum issue remains just over two Ethereum coins, which means assets have yet to hit the long-awaited deflation and the network is still issuing more coins than burns.
The fee-burning mechanism was introduced in EIP-1559, which went live back in August. The network has spent only three full months burning $4.2 billion worth of coins. Thanks to the NFT and DeFi industries, the burn rate of the network has continued to increase, which has led to the result that the community is seeing today.
Before the update, the fee structure of Ethereum was working in favor of cryptocurrency miners that were receiving enormous fees in periods of high network congestion. At one point, users had to pay up to $ 80 to complete a single transaction.
With the implementation of the new fee-burning mechanism, fees that previously went to miners are now being burned and moved out of supply circulation, which sometimes leads to the appearance of a “deflationary block.” Each deflationary block issues less Ethereum than was previously burned.
How the market reacts
While in general the market reacted positively to the implementation of a combustion mechanism which resulted in 74% growth from October 1 to November 9. After reaching the most recent ATH, Ethereum has retraced down by 11% due to the global cryptocurrency market correction.
Over the past week, Ethereum’s price has fluctuated around $ 4,100 to $ 4,200, in line with other major cryptocurrencies moving with lower volatility compared to the previous week.