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Over 4,000 ETH burned hours after EIP-1559 upgrade

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Over 4000 ETH have been ‘burned’ just hours after the ambitious EIP-1559 upgrade was rolled out on the ETH network, data from multiple sources shows.

The burned stash is worth over $11 million at press time, representing a tiny portion of the asset’s $325 billion market cap. Still, the burns mean everything is working as intended, ahead of ETH’s move to a proof-of-stake upgrade in the coming months.

As on-chain tracker EtherChain shows, 4,067 ETH have been burned as of 0800 GMT at an average ‘basefee’ of 30 gwei. This means 2 ETH are burned every minute—and 120 ETH each hour—at the current rate (this, however, is subject to change as network demand fluctuates).

A fair amount of ETH is burned per block as well. As the below image shows, block 12970044 saw over 0.8 ETH getting burned in total, while 12970045 saw a smaller 0.68 ETH burned. Zero ETH burned in both blocks 12970051 and 12970050, data further shows.

Over 4,000 ETH burned hours after EIP-1559 upgrade

How EIP-1559 helps

The EIP-1559 makes fees more predictable for users. After the upgrade yesterday, a ‘base transaction fee’ is now charged to users, and it is algorithmically determined by how busy the network is. Users, on their end, ‘tip’ miners to have their own transactions processed quicker.

The miners themselves will only receive the tips, and the ‘base fee’ amount will be ‘burned’ out of supply forever. In terms of the market effect, this means there’s now fewer and fewer ETH supply available on the market daily, making the asset even more valuable to holders and investors, at least in theory

Meanwhile, not everyone says prices are bound to go up only after the EIP-1559 upgrade. “I think people are still drastically overestimating what EIP-1559 will do in the short term, while also drastically underestimating what it will do in the long term,” said Cinneamhain Ventures partner Adam Cochran in a tweet yesterday. 

And recent price action (ETH has budged just +2% since yesterday) might just prove that sentiment correct.

The post Over 4,000 ETH burned hours after EIP-1559 upgrade appeared first on CryptoSlate.


All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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