Over $4.5 Billion Worth of Ethereum Has Been Destroyed.
Since the execution of Ethereum Improvement Proposal (EIP) 1559 via the London hard fork on August 5, almost $4.5 billion of the second-largest cryptocurrency by market valuation, Ethereum, has been burnt.
According to data from the tracking website Watch the Burn, 1.7 million ether worth $4.58 billion has been destroyed since August, with a median of 307 ETH worth $800,000 burned every hour and 12,300 ETH worth $32 million burned per day.
Ethereum’s net issuance per day has fallen to roughly 1,100 ETH, suggesting that its net reduction is now more than 91%. According to some experts, ETH might become a deflationary currency if burns outstrip net issuance, which has happened on a few blocks.
The London hard fork includes the adoption of Ethereum Improvement Proposal (EIP) 1559, which altered the way network transaction fees operate. Instead of an auction mechanism, users now pay a flat charge for their transactions to be processed by miners and can tip miners to have their transactions processed faster.
Miners are not paid the basic fee as it may encourage them to purposefully clog up the network in order to maintain it high and earn more. Instead, the base fee is burnt, thus eliminating ether from the market for good. It rises when demand is high and falls when demand is low.
Analysts anticipated that $5 billion in ETH may be burnt in a year at the time of the update. The latest estimate is that far over $5 billion will have been burnt by August of this year.
Following the London hard fork, several investors have been positive on ETH. Former Goldman Sachs executive Raoul Pal, for example, has stated that he feels Ethereum is the “greatest trade” setup he has ever seen, as the cryptocurrency’s fundamentals indicate it has a significant upside ahead of it.
Similarly, Singapore-based cryptocurrency hedge firm Three Arrows Capital has invested more than $80 million in the cryptocurrency since its price fell below $4,000 late last year.
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