$3.8B Ethereum (ETH) Burned Since EIP-1559: What It Means

On-chain data shows that more than 2.6 million Ethereum ETH/USD, worth around $3.8 billion at current prices, has been burned to date.

What Happened: Supply and burn data from OKLink shows that the amount of ETH destroyed after EIP-1559 took effect has crossed the 2.6 million mark as of Monday. 

See Also: WHAT IS EIP 1559?

EIP 1559 is an Ethereum Improvement Proposal that was introduced to reform the fee market structure of the network but also served to improve the transaction speed and make the asset deflationary by nature.

The proposal required all network participants to burn ETH tokens to pay gas fees which reduced the total supply of ETH, making it a deflationary asset.

When EIP-1559 was first introduced, blockchain infrastructure platform ConsenSys stated that modeling how deflationary ETH would be post-EIP-1559 would be hard, considering variables like expected transactions and network congestion.

“In theory, the more transactions that occur, the more deflationary pressure that the burning of the base fee will have on the overall Ethereum supply,” said ConsenSys in a blog post.

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EIP-1559

EIP-1559 was an attempt to create a bullish narrative at the expense of the miners. As one of the most important pillars of any Proof-of-Work (PoW) network, miners naturally are a political force and should wield some political power and influence,

— EthereumPoW (ETHW) Official #ETHW #ETHPoW (@EthereumPoW) August 10, 2022

See Also: $800K Ethereum Is Burned Every 60 Minutes

Price Action: At press time, ETH was trading at $1,577, up 8.78% over the last 24 hours. The market-leading cryptocurrency Bitcoin BTC/USD was trading at $20,400, up 2.47% over the same period, as per data from Benzinga Pro.