- The one millionth ETH token has been burnt following the EIP-1559 upgrade in August
- OpenSea has been the biggest burner to date, contributing a 10th of the total burned
- Ethereum is still an inflationary ecosystem, despite the EIP-1559 upgrade
The millionth ETH token has been burnt since the introduction of the EIP-1559 upgrade, according to blockchain metrics platform Crypto Rank. NFT marketplace OpenSea is the biggest burner, burning over 110,000 ETH, with ETH transfers and the Uniswap exchange taking up second and third places. EIP-1559 was implemented in August which saw miners’ rewards massively reduced and a deflationary mechanism put in place, and although one million ETH has been burned, Ethereum remains an inflationary cryptocurrency.
📣@Ethereum transaction fee-burning mechanism has removed 1M #ETH from the network’s circulation since it came into effect.
👉https://t.co/oLDJyg9PyC pic.twitter.com/FwkmI8lL6x
— CryptoRank Platform (@CryptoRank_io) November 24, 2021
OpenSea Contributed 1/10th Total Burn
EIP-1559 was a hotly contested upgrade, with miners understandably not pleased about their income being massively cut, but the upgrade went through successfully in August, with 4,750 ETH was burned within the first 24 hours. The rate has increased since the upgrade in August, with an average of around 10,000 ETH burned every day in the last month.
The success of NFT platform OpenSea is highlighted in the burn statistics, with its popularity reflected in the fact that users have helped burn 110,237 ETH since the implementation of EIP-1559, more than Uniswap and transfers on the Ethereum network itself through the likes of MetaMask. This puts the dollar valuation of burned ETH tokens at $4.3 billion in just three months – a simply staggering amount.
EIP-1559 Hasn’t Made Ethereum Deflationary
However, despite this milestone, Ethereum is still an inflationary asset. The blockchain currently emits about 5.4 million ETH per year, some 1.5 million more than the Ethereum network is scheduled to burn every 12 months. This will change however when Ethereum moves to a proof-of-stake consensus mechanism next year when staking rewards will be far lower than mining rewards.
