A fortune in cryptocurrencies is lost forever and will never be used again. This is because the EIP-1559 update, which introduced the ETH burning process, has already destroyed around 2 million ETH.
2 million ETH is lost forever
The burn mechanism, which became active after the London hard fork in August 2021, is part of the effort to keep the token deflationary and is destroying around 2,000 ETH a day.
To date, more than $5 billion worth of ETH tokens have been burned, according to current value.
EIP-1559 is perhaps one of the most important upgrades to ETH and was essentially developed to keep transaction costs stable.
So, instead of the previous method that led to an unstable mining rate, introduced a base rate of GAS. This allows users to tip miners.
Also, the update introduced the token burning mechanism, which burns a portion of the GAS fee.
Since the burning began, the upgrade has significantly reduced the overall supply of ETH in circulation. As a consequence, it put deflationary pressure on the token. At the same time, it has been playing an active role in reducing ETH’s high GAS rates.
OpenSea, the largest NFT marketplace, is responsible for most of the burns. After all, it causes the highest amount of transactions on the network. Next comes the popular decentralized exchange Uniswap.
PoW to PoS
It is no longer news that ETH is working on transitioning from its current Proof of Work (PoW) model to a Proof of Stake (PoS) consensus model.
The transition, commonly referred to as a Merge, will involve merging the Beacon Chain with the mainnet. In this process, the ETH Foundation recently announced that it has launched the Kiln Testnet, the last public testnet before the merge. Soon, many are predicting that the transition will take place before July.
ETH’s transition to a PoS network will not only fulfill an old promise, it is also expected to have a significant impact on the entire industry.