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Around 2.3 ETH is burned every minute thanks to the new transaction fee mechanism introduced in the Ethereum upgrade in London on August 5.
The highly anticipated London hard fork went live on Wednesday this week, ushering in the EIP-1559 upgrade which adjusted gas charges. Part of this adjustment introduced a mechanism that burns part of the base fees collected.
The total amount of ETH burned since the upgrade started around 14 hours ago is around 3,395 ETH depending on the different counters available. Etherchain reports an average burn rate of 2.36 ETH per minute. That works out to $ 6,596 per minute, or roughly $ 395,000 worth of ETH going up in metaphorical smoke every hour at current prices.
An alternative meter called Ultrasound.money reports a total consumption of 3,390 ETH worth $ 9.5 million at the current ETH price of around $ 2,800. The tracker reports that the popular NFT OpenSea marketplace is ETH’s first burner with 374 ETH, or just over $ 1 million, destroyed since the upgrade began.
In second place was Uniswap version 2 which had burned 263 ETH, or $ 740,000, at the time of writing. Uniswap founder Hayden Adams commented on the burn rate, stating that if things continued at the same rate, the protocol could burn up to 350,000 ETH, or nearly $ 1 billion per year.
It has been 2 hours since the launch of EIP-1559
@Uniswap (v2 + v3) is doing its part by burning ~ 80 ETH so far
❤️❤️ At this rate, Uniswap alone is burning 350,000 ETH – for almost $ 1 billion – per year
Congratulations to everyone who made EIP-1559 possible. Huge win for Ethereum
– Hayden Adams (@haydenzadams) August 5, 2021
Related: A London travel guide: what the EIP-1559 hard fork promises for Ethereum
The Bankless DeFi newsletter launched a few figures to try to predict the impact on the future offer. Since the base fee is between 25% and 75% of the total transaction fee, manual calculation and forecasting is difficult.
He modeled burn rates in this range using data on fees generated in 2021 and concluded:
“By annualizing these numbers, it means that between 800,000 and 2.4 million ETH are expected to be burned in 2021.”
Combined with reducing the issuance of bulk rewards from the merger to proof-of-stake, the burning of the fee could lead to a deflationary bid from Ethereum, allowing it to fulfill the increasingly used meme of ” ultrasound money ”.
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