70K ETH Has Been Burned By EIP-1559: Report

About 70K ETH has been burned by the EIP-1559 upgrade as the network removed $221 million from circulation so let’s read more about the report in our Ethereum news today.

Ethereum developers implemented a change to the network which burns gas fees rather than handling them to the miners. $221 million worth of ETH or 70K ETH has already been burned since teh change. The network has been on fire since the transaction fee-burning update as the EIP-1559 came into effect so the total amount of coins burned removed from teh network’s circulation, topped 71,000 ETH or $221.5 million. The upgrade that had been used to pay for transactions on the network like swapping a coin on a decentralized exchange or transferring an NFT and EIP-1559 was one of the five upgrades introduced as a part of the London hard fork on August 5.

Before EIP-1559, the network didn’t burn the tokens but several ETH-based tokens like Shiba-Inu burn tokens as a part of the monetary policy. Instead, gas fees went to ETH miners which is a decentralized network of the powerful computer that keeps the network humming but now unless users tip the miners, they won’t be able to receive those fees which are instead burned. The network was used to determine the gas price as per the laws of supply and demand and EIP-1559 replaced that with a flat fee apart from the exceptional periods of congestion as it costs 32 gwei to process a simple transaction in 3 minutes at the time of writing.

The transaction costs are much higher for even more complicated transactions as it costs $8.80 to transfer a token on the NFT marketplaces. OpenSea, the biggest NFT marketplace is also the biggest gas spender responsible for 8750 ETH since the upgrade came into force. OpenSea’s trading volumes spiked since the CryptoPunks trading frenzy started on July 31. it costs $20.2 to process the simple token swap on the decentralized finance protocol Uniswap while the protocol accounts for the second most amount of gas burnt, totaling 5128 ETH so far.

Ethereum’s gas-guzzling miners will not be here for long as the network will soon transition to the proof of stake consensus mechanism that doesn’t need miners. When that comes into force, ETH will rely on the stakers. Ethereum stakers verify transactions by pledging ETH to the 2.0 smart contract and all stakers are rewarded with the newly-minted ETH for securing the network just like the miners at 1.0. the amount staked on Etheruem surpassed 7 million ETH worth $22.9 billion, as per the data from Nansen.