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.