More Than 200,000 Ethereum Burned by EIP-1559
The Ethereum blockchain is burning up.
The amount of Ethereum burned by EIP-1559, a recently implemented upgrade that burns transaction fees that used to go to miners, has surpassed 200,000 ETH (about $675 million at the prices at which it was burned).
A total of 204,281.8 ETH has been burned, worth some $682 million, according to ethburned.info.
At current rates, about $1.2 million worth of ETH, or 300 ETH, gets burned each hour. So far, 4,877 ETH has been burned today. Yesterday, the network burned 10,675 ETH and on Friday it burned 13,839 ETH.
EIP-1559 was introduced in early August as a way of hastening the upgrade to Ethereum 2.0, the next generation version of Ethereum that transitions the blockchain from proof-of-work, a computationally intensive way of verifying transactions, to proof-of-stake, an environmentally-friendly algorithm that uses far less energy.
To do this, EIP-1559 destroys ETH from circulation instead of paying it to the miners that validate transactions through proof-of-work computations. The move to EIP-1559 was unpopular with miners who had shelled out money for graphics cards that are adept at mining Ethereum.
Ethereum will “merge” with the proof-of-stake version of its blockchain later this year or early in 2022. However, it will take a few years before Ethereum 2.0 will have the same smart contract functionality as Ethereum 1.0.
One anticipated side effect of EIP-1559 was that fees would reduce, or at least become more predictable. However, fees on Ethereum are still sky high—and are getting higher due to the ongoing resurgence of NFT projects.
As of this writing, a single swap on Uniswap costs $76.31, and an ERC-20 transfer costs $24.8. The biggest gas guzzler is NFT marketplace OpenSea, which used 11.65% of all gas on the Ethereum network in the past 3 hours, and 15% in the past day.
Miners no doubt are looking on with envy.