ETH Burned $100M In Fees Since EIP-1559 Roll Out

ETH burned $100M in fees since the EIP-1559 rollout, creating a mechanism to burn the transaction fees as we are reading more in our latest ethereum news today.

Since it was implemented via a network upgrade, the price of ETH increased. The ETH London hard fork which was a long-awaited network upgrade that included a measure to reduce the supply growth of the coin went live on Thursday. Since the hard fork, ETH burned $100M in fees and the coins were taken out of circulation helping to boost the price from $2725 to $3230 as per the data from Nomics.

The London upgrade featured five code changes but the most discussed one was the EIP-1559 and the Etheruem improvement proposal altered the transaction fee structure for the network. So rather than the fees going directly to the miners that process and validate transactions, one base fee will instead go to the network and will be destroyed. While EIP-1559 was a way to improve user experience by automatic the transaction prices and taking the guesswork from the auction process, it has had the effect of stoking the demand by reducing the supply.

Bitcoin was created with a 21 million BTC supply limit but ETH had no such ceiling. The EIP-1559 inserted deflationary pressure and with each new block of transactions added to the chain, new coins are created and go to the miners as a reward but some ETH is removed via the fees. According to the website ultrasound.money, more than 31,000 ETH has been destroyed and at current rates, that is over $100 million but is obviously unknown how much of the coins will be worth if these assets hadn’t been burned.

As recently reported, The Ethereum network removed $30 million from circulation since the London hard fork launched on August 5 which saw developers implementing a change to the network that burns transaction fees. $30M in ETH burned since the change and the NFT projects top the leaderboard of Ethereum gas burners with NFT marketplace OpenSea leading the change. Ethereum’s new transaction fee burning mechanism removed $30 million in ETH from the network’s circulation since it came into effect. EIP-1559 is one of the five upgrades introduced as a part of the Ethereum London Hard Fork and it replaced the auction-style transaction fee mechanism with an algorithmically determined alternative.