A total value of 1,302,422 ETH, representing over $4.8 billion has been burned as of December 30, 2021 since Ethereum began burning a portion of transaction fees in August 2021.
The amount of ETH burned has also become a metric that is used to judge activity on the blockchain and specific protocols with different trackers providing a BURN leaderboard.
As of December 30, 2021, Ultrasound Money, one of the trackers, shows the protocols where addresses are burning the most ETH:
- OpenSea – 137,027.96 ETH
- Uniswap V2 – 113,182.74 ETH
- Tether USD – 69,038.54 ETH
- Uniswap V3 – 42,413.07 ETH
- MetaMask – 29,875.91 ETH
Other leading burners since August 2021 include USD Coin, Axie Infinity, and Sushiswap.
Part of the EIP-1559 upgrade, the token burn mechanism went live on August 5, 2021 replacing a costly system where users had to make bids for how much they would pay miners to validate their ETH transactions with one that introduced a base fee which is burned.
As a solution, EIP-1559 was meant to make fees easier to estimate by making the transactions more reliable. This is important since under-estimating fees can lead to canceled transactions and wasted fees.
EIP-1559 was also designed to exert deflationary pressure (reducing inflation ) on the ETH supply since the base fee gets burned and can no longer be used on the network.
Finally, with the current burn rate of 6.16 ETH burned ever minute, it is projected that ETH supply will peak at 118.5M ETH in February 2022 after which the amount of ETH burned will outpace the issuance.
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