2.8M ETH worth $8.8 billion burned since Ethereum’s London hard fork

Since the introduction of Ethereum Improvement Proposal (EIP) 1559 in the London hard fork, the blockchain has burned a total of 2.783 million Ether (ETH), currently worth $8.76 billion.

According to data provided by Ethereum burn tracking service Ultrasound.Money, since the introduction of the London hard fork in early August, the network has been burning Ether at an average eye-watering rate of $12.100 per minute.

A token burn refers to permanently destroying a certain number of tokens. Burning is typically a process where the coins are sent to a public address that is not accessible by anyone.

Token burns are often implemented as a way to manage inflation. Another use case is to demonstrate the company’s commitment to the long-term success of the token. The burns are meant to decrease the overall supply of the coin, potentially increasing its value.

EIP-1559 was a proposal for a change to the Ethereum blockchain. It is aimed at improving the efficiency and scalability of the network. When applied as part of the London hard fork, it introduced a dynamic gas price based on supply and demand, a base fee that is burned alongside excess gas. This change is why so much Ethereum has been burned so far.

Network data also shows that Ethereum’s supply has decreased since the abandonment of proof-of-work (PoW) in favor of proof-of-stake (PoS). Running PoS validator nodes requires significantly less computing power and energy, which allows the network to disburse significantly fewer rewards to those running the servers that maintain the network in operation through the issuance of new Ethereum.

Less new Ethereum is issued than is being burned as a result of the network policies explained above, resulting in Ether becoming a deflationary asset. Ether’s supply peaked at 121.3 million back in September and now is standing at 120.1 million ETH — a decrease of nearly 1%.