Over 2 million ETH has been burned since Ethereum introduced its token burn mechanism in August 2021.
According to Watch the Burn, a dashboard monitoring the burn mechanism, the network has destroyed a total of 2,004,256 Ethereum since its inception.
In dollar terms, that’s more than $6 billion removed from circulation forever.
In August 2021, Ethereum introduced the token burn mechanism dubbed, proposal EIP-1559, as part of the London Hard Fork Upgrade. EIP-1559 restructured the network’s fee structure so that instead of all the fees paid to execute various operations on Ethereum going to miners, EIP-1559 essentially split these fees into a base fee and tips (the latter of which would go to miners).
It is the base fee that is burned, which is another way of saying the cryptocurrency is destroyed and removed from circulation.
Other than the London Hardfork, the next biggest upgrade in the history of Ethereum is expected in June 2022, as the network transitions to full proof-of-stake (PoS) consensus mechanism.
Originally, just like Bitcoin, Ethereum was just a Proof-of-Work (PoW) blockchain, but introduced a PoS Beacon Chain on December 1, 2020, with about 9,500,000 ETH ($37 billion, in current value) already staked there.
The merging of the Beacon chain and the main Ethereum chain is the next expected upgrade in June 2022.
According to Ethereum, Proof-of-Stake comes with a number of improvements to the Proof-of-Work system:
- Better energy efficiency – you don’t need to use lots of energy mining blocks
- Lower barriers to entry, reduced hardware requirements – you don’t need elite hardware to stand a chance of creating new blocks
- Stronger immunity to centralization – Proof-of-Stake should lead to more nodes in the network
- Stronger support for shard chains – a key upgrade in scaling the Ethereum network
With the efficiency expected from the merge, the network will cut down its issuance of Ether to validators, such that, altogether EIP-1559 and the Merge are expected to cause Ethereum to burn more tokens than issued.
This will eventually result to Ether becoming deflationary.
RECOMMENDED READING: So You Want to Be an Ethereum 2.0 Validator? Here are the Requirements
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