Since Ethereum’s London upgrade was implemented — introducing the EIP-1559 fee burning mechanism — the network has burned a total of 100,000 ETH, worth $300 million, in just 20 days.
These coins are being burned during the transaction fee process. To make a transaction, you now pay a base fee, which gets burned, and a priority fee that’s effectively a tip to the miner. (For a detailed explanation of how fees now work, see here.)
As a result, this has significantly lowered the level of inflation on the Ethereum blockchain. At present, the supply increases by about 5% each year, but this has been effectively reduced by 35% due to the amount being burned in transaction fees.
EIP-1559 has made it easier to estimate how much should be paid in transaction fees to get a transaction processed within the next few blocks. But since we are in the middle of NFT summer — with digital rocks selling for millions of dollars — gas fees can pick up considerably, especially when NFT collections are being minted.
Activity on the Ethereum blockchain remains high, with 1.2 million in daily transactions, according to The Block’s Data Dashboard. The network continues to move $8.7 billion in volume per day, in total more than $200 billion per month.
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