500,000 ETH Worth $1.7B Burnt Since August Network Update

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In Brief
  • Annual ETH burn rate could reach three million.

  • Ethereum will turn deflationary after 'the merge.'

  • OpenSea is still the cause of high gas fees.

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More than 500,000 ETH worth around $1.7 billion at current prices has been destroyed since the Aug 5 London upgrade deployed EIP-1559. The milestone was noted by industry researcher Evan Van Ness who added “We’re on pace for nearly 3 million $ETH burned every year.”

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The Ultrasound.Money fee burning tracker is currently reporting that 500,357 ETH has been burnt and the current burn rate is 2.7 million per year.

It also reports a daily burn rate of 5.2 ETH per minute or approximately $18,356 per minute. At the current rates under proof of work mining, the Ethereum monetary system has an inflation rate of 2.2% per year.

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When ‘the merge’ combines the Ethereum chain with the ETH 2.0 beacon chain and the consensus is switched to proof of stake, the supply growth will become deflationary at a rate of -2% per year according to the simulator.

Ethereum did actually flip to a deflationary state in mid-August when gas prices skyrocketed and more than 900 ETH was burnt in an hour.

Biggest gas guzzlers

The largest consumer and burner of gas is NFT marketplace OpenSea which has burned 1,037 ETH over the past 24 hours. This is about double the amount burned by Uniswap v2 and triple that burned by Tether transactions over the past day.

The current average fee for Ethereum transactions is around $30 according to Bitinfocharts. NFT mania is still the root cause of demand on layer 1 Ethereum and the high cost of gas.

According to Etherscan, OpenSea has generated $3.9 million in Ethereum fees, or almost 13% of the network total, over the past 24 hours.

There are currently around 117.8 million ETH in circulation, consisting of 85 million or so in accounts, around 25 million locked in smart contracts, and the remainder being staked.

ETH 2.0 staking update

The Beacon Chain explorer is reporting that there has been 7.9 million ETH staked since it went live in December last year. This equates to around $28 billion at current prices or 6.7% of the total supply.

The assets are locked up until the merge which has been slated for Q2, 2022. There are several staking services that offer flexible Ethereum staking but they do take a cut of the profits.

At the time of press, Ethereum was trading for $3,600 according to CoinGecko.

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Martin has been covering the latest developments on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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