Ethereum network burned around 2 million ETH following activation of EIP-1559

This has led to ETH becoming more deflationary than BTC

14.03.2022 - 14:15

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What’s new? The Ethereum (ETH) network has burned 1, 975, 885 ETH since the EIP-1559 upgrade was added on August 5, 2021. 2 million ETH is $5 billion, at the exchange rate on March 14. The daily burn rate is 1,77 ETH per minute, or $4 555, according to the Ultrasound service.

Link to Ultrasound.money

What is EIP-1559? The Ethereum Improvement Proposal (EIP) is a proposal to improve ETH. EIP-1559 is one of the components of the London upgrade. Before the London upgrade, the fee in ETH was formed on the auction principle. Miners have always added to the blocks and confirmed those transactions whose initiators make a higher fee. The users had to pay fees to the miners to conduct fast trading operations. After the EIP-1559 upgrade, some of the fees started to be burned, leading to the deflation of ETH.

What preceded it? In December 2021, Ethereum co-founder Vitalik Buterin introduced the EIP-4488 upgrade, designed to reduce the gas cost for Calldata transactions and add a cap on the amount of the shared transaction data per block. However, the blockchain developers opposed it, arguing that the new network upgrade may lead to a drop in the rollup transactions, resulting in users paying even more.

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