Over 2 million Ethereum, or around $6 billion, were permanently removed from circulation thanks to the Ethereum network.
Through the EIP-1559 upgrade that was implemented last year, Ethereum has formally burned more than two million Ethereum.
The major NFT marketplace OpenSea, followed by Ethereum transfers, is the largest on-chain gas consumer on the Ethereum network. The likes of Uniswap, StrongBlock, Tether, etc. are further gas-guzzlers.
Ethereum is on fire
The Ethereum network has destroyed over 2 million ETH, according to the most recent statistics in Watch the Burn. This means that the second-largest cryptocurrency’s $6 billion in total value has been permanently withdrawn from circulation.
On the second-largest blockchain, Ethereum Improvement Proposal (EIP) 1559 is likely one of the most well-liked updates. The London hard fork’s fee burning plan, which led to a deflationary reaction, was put into practice last summer. In the beginning of September, Ethereum had its first net-negative issuance.
Over the past seven months, a sizable portion of Ethereum has been lost. The EIP-1559 divided the network’s transaction cost, which was previously paid to the miners, into a base charge and tips. The tip goes to the miners while the base fee is destroyed.
The Ethereum network’s miners received tips totaling more than 344k ETH, or about $1 million.
The switch by Ethereum to a proof-of-stake (PoS) network has been in the works for many years. On the Kiln testnet, the network merged last week. It is anticipated that this will be the penultimate testnet prior to the eventual change in the consensus method, and the “merge” is scheduled to take place here sometime in the second quarter of this year.
After the “merge,” the present PoW consensus system will be completely phased out, and only PoS will be used to create new blocks on the blockchain. This action would assist Ethereum in separating itself from Bitcoin’s environmental debate.
According to the most recent data, stakers have locked up more than 10 million ETH on the Ethereum 2.0 deposit contract, which was valued at more than $29 billion at the time of writing. The market’s supply of freely traded ETH is reduced by locked ether by removing it from circulation.
The reduction in ETH issuance per block after the merge is live would put additional pressure on supply. Although the deflationary nature of Ethereum did not have a significant impact on the price, many analysts think that the merger will be a significant catalyst.
Gas Prices Are Still Variable, and Opensea Is the Biggest Ether Burner
EIP-1559 did not appear to have any impact on the high gas costs customers saw when attempting to send on-chain (layer one) transactions weeks after the London upgrade. In fact, ETH’s average gas rates surged to $59 per transaction the very next month after the London upgrade. Currently, an ethereum (ETH) transfer costs only 0.006 ETH ($16.61) on average, or 31.3 gwei, to push.
The non-fungible token (NFT) exchange Opensea is currently the biggest on-chain gas burner as the network has burned $6.9 billion in ether via EIP-1559. The largest NFT market has burned about 229,916 ether worth $790,499,348 across 14,635,232 ETH transfers as of this writing.
With 178,166 ethers destroyed to date, routine ethereum transactions are the second-largest gas-burning entity. Following Opensea and standard ethereum transfers, large ETH-burning entities use platforms and protocols like Uniswap v2, Tether (USDT), Swaprouter 2, Uniswap v3, and Metamask.