Since London hard fork, over $100 million in ETH has been burned, helping fuel a price increase to $3,300

By Selena On Aug 12, 2021

Since the London Ethereum hard fork, over $100 million in ETH has been burned or taken out of circulation, helping fuel a price increase from $2,725 to $3,230.

Ethereum has burned $100 million in fees since EIP-1559 took effect since Ethereum’s London hard fork

As AZCoin News reported, the London upgrade featured five code changes, but the most discussed was EIP-1559. The “Ethereum Improvement Proposal” altered the transaction fee structure for the network. Instead of fees going directly to the miners who process and validate transactions, a base fee would go to the network and promptly be destroyed.

And so far, more than 31,119 ETH has already been burned, according to block explorer Etherchain’s burn tracker. At current rates, that’s a little over $100 million – though it’s unknown how much ETH would be worth if those assets hadn’t been burned.

ETH burned per block | Source: Etherchain

According to Oklink, the average burn value of a single block is 0.722 ETH. The Ethereum 2.0 contract pledge adds 17,300 ETH in the past 24 hours.

Whereas Bitcoin was created with a 21 million BTC supply limit, Ethereum has no such ceiling. EIP-1559 then inserts deflationary pressure. With each new block of transactions added to the chain, new ETH is created and goes to a miner as a reward, but some ETH is removed via fees.

Over 10% of the burned fees have come via transactions on the NFT marketplace OpenSea, where people can sell or bid on digital collectibles and art. Those who like to feel the burn will likely look forward to Ethereum’s pending move from a Proof-of-Work consensus algorithm to a minerless, Proof-of-Stake network. Due to Ethereum 2.0’s structure, the total supply of ETH may even decrease as more fees are burned than will be created.

ETH/USD 4-hour chart | Source: TradingView

At press time, ETH is trading at $3,180, recording a gain of over 18% over the past 24 hours. In the case that Etherem continues to burn coins, it is highly likely that the price will continue to increase further.

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