Three months after the implementation of EIP-1559, over a million ETH were burned, but that doesn’t really drain the cryptocurrency and we find out why in today’s Ethereum news.
Over a million ETH has been withdrawn from circulation since EIP-1559, and at today’s prices that’s worth more than $ 4.2 billion. Data from Observe the Burn shows that the Ethereum network has reached an important milestone and that since the London Tough Fork on Aug.NS and the proven network capable of sustaining a high burn rate destroyed its first $ 1 billion in a month.
Around 1.5 million ethers were minted and given out to miners as block rewards, and with that there were other times when the burn rate exceeded the release rate, like earlier this month. The London Tough Fork is said to lower transaction fees by changing the fee structure of Ethereum, but instead of passing fees on to the miners, they are compensated before the block reward. In the meantime, the charges will be sent to a burning pool where the money will not go back into circulation. However, the fees at Ethereum are still terribly high, as the amounts of ETH burned so far show. Vitalk and other members of the community have advocated moving certain base layer network functionality to remove the network.
The Ethereum community is pretty excited about the development most of the time and it shows that having a high burn rate is a good trait. However, some even believe that it is superior to Bitcoin because of its steady supply. However, Ethereum is still a net inflation coin with no supply cap and its rate of issue has decreased 67% since EIP 1559 but is still not deflationary. Deflation means huge transaction fees to fund the burning pool, and while this reduces supply and helps HODLERs, it harms other users trying to spend money and transact on the network.
As recently reported, Ethereum fees have been a topic of discussion for several months as the average transaction cost often exceeds $ 50 depending on the day. The bad image came after Zhu announced that he would be leaving the network and taking his capital with him as Ethereum does not serve regulatory users. Avalanche and Solana, on the other hand, position themselves as inexpensive and undervalued products.