Since the implementation of EIP-1559 in August 2021, the Ethereum network has reached a new target of burning over 1.5 million ETH.
On-chain data from Etherchain shows that the most established smart contract blockchain platform, Ethereum, has been burning its network native token at an astounding rate since the EIP-1559 upgrade.
The EIP-1559 upgrade, also known as the London hard fork, which removed ETH base fees from Ethereum transactions and added a way to burn Ethereum fees, was released on August 5. Base fees are the bare minimum required for a transaction to be included in an Ethereum block.
The blockchain has burned 1526130.0 ETH worth approximately $5.13 billion in the five months since the London hard fork upgrade.
The number of burned ETH coins has exceeded the number of issued coins in the last week, resulting in a negative issuance.
Negative issuance suggests that the number of coins circulating on the network has decreased, which could be interpreted as a deflationary effect that the majority of Ethereum holders have been anticipating.
The main goal of the fee-burning mechanism proposed in the EIP-1559 update last summer was to make Ethereum a deflationary asset. It would only be possible if the asset’s net issuance remained below the number of coins burned over a given time period.
The London Hard fork and upgrades are part of Ethereum’s transition to a proof-of-stake network, which will eliminate Ethereum mining and make the currency more long-term sustainable. The update, also known as “the merge” or “ETH 2.0,” aims to drastically reduce the blockchain’s gas costs.
Due to its use in the expanding DeFi and NFT spaces, as well as its role as the “first-mover” in blockchains, Ethereum saw a comeback in attention, demand, and price action following the implementation of the network update in August 2021.