According to current metrics, the Ethereum blockchain has burned 2.35 million ether since the implementation of Ethereum Improvement Proposal (EIP) 1559. The $8.10 billion in value was burned over the course of nine months and during the last seven days, 18,110 ether worth $34.9 million was destroyed.
2.35 Million Ethereum Burned – Ethereum Dev Says Merger Could Happen in August
About 288 days ago, Ethereum developers implemented EIP 1559, a ruleset upgrade that fundamentally changed the basic gas fee algorithm in the protocol and the network now burns base charge per gas.
Since the August 5, 2021 London upgrade, after EIP 1559 was codified into the codebase and live, 2.35 million ether worth $8.10 billion in USD value has been destroyed forever.
The day after EIP 1559 was implemented, Ethereum co-founder Vitalik Buterin explained that the change was “definitely the most important part of [the] London [upgrade].”
During the last 24 hours, 2,396 ether worth $4.63 million has been burned. On May 1, 2022, the network saw the largest daily burn rate ever with 71,718 ether worth $138.78 million. The second highest burn rate daily record was on January 10, 2022, as 19,424 ethereum worth roughly $37.5 million was destroyed that day.
The biggest Ethereum burner today is Opensea, as the market burned 229,925 Ether across 14,639,327 transactions. The gas used for ether transfers burned a total of 207,072 ETH, and Uniswap V2 burned 131,457 ether.
While the London upgrade’s EIP 1559 was a big protocol change, the next big shift will be when The Merge is applied. At that time, Ethereum will transition to a full proof-of-stake (PoS) network from its current proof-of-work (PoW) consensus algorithm.
Ethereum proponents are already gearing up for The Merge as they suspect the change will be codified at some point this summer. Most recently, on May 17, Ethereum-focused software company Consensys released an early access version of “Bonsai Tries” that aims to be a few steps ahead of the official Merge transition.
Furthermore, at the recent Permissionless conference, Ethereum developer Preston Van Loon said the public may see The Merge implemented by August. Ethereum developer Tim Beiko recently explained The Merge will likely go live by the third quarter of 2022. Beiko further explained that he “strongly suggests” that miners do not invest in more mining rigs going forward.
Despite the upcoming changes, Ethereum’s PoW hashrate was at the highest point in the network’s lifetime on May 13, at a block height of 14,770,231. of the protocol and many crypto proponents believe that Ethereum will be “ultra-sound” money with the deflationary mechanism.
A simulation of The Merge indicates that after the transition, ethereum will become scarcer. Currently, Ethereum’s issuance rate is 5.4 million ethereum a year, and after The Merge, the issuance rate will be around only 500,000 ether per year. While current supply growth is 3.7% annually, after The Merge, it will be roughly about 0.4% per year.
Amidst all these changes, the burn rate of Ethereum will be the same, which is estimated at around 900,000 ethers per year. However, large spikes like the 71,718 ethers burned on May 1 can significantly alter estimates.
