The amount of Ethereum burned since the London upgrade in early August has just reached a milestone of one billion dollars’ worth.
The milestone figure was observed by EthHub and Daily Gwei founder Anthony Sassano who tweeted on Sept 16 that the amount of ETH burned had surpassed 300,000.
At the time of writing, the ultrasound.money platform that keeps a track of the burning process was reporting a total burn of 302,295 ETH. At current prices, this works out at just over $1 billion.
The burning process began on Aug 5 when the Ethereum London upgrade was deployed and with it the long-awaited EIP-1559. The upgrade altered the transaction fee mechanism to do away with the auctions and make gas calculations more predictable while burning a portion of the network fee.
Deflationary Ethereum or not?
The current burn rate is around 5 ETH per minute which works out at 7,200 ETH per day or 2.6 million per year. This would be a theoretical total of more than $9 billion per year at current asset prices.
Ethereum is currently under heavy load so these figures are on the high side, and the prices are not static which adds to the variables. The tracker also has a supply growth simulator which suggests that the current rate of inflation is 2.3% per year since 5.4 million ETH are mined annually.
Once “the merge” takes place, the issuance is expected to become deflationary as more ETH is being burned than produced. The simulation currently puts the figure at -1.9%.
The merge is when the ETH 1.0 chain will merge or “dock” with ETH 2.0 Beacon Chain marking the end of proof-of-work and a transition to proof-of-stake. This is expected to occur sometime in Q1 or Q2, 2022 according to the official documentation.
The biggest consumer of gas at the moment is NFT marketplace OpenSea which has generated around 850 ETH, or almost $3 million, in fees over the past 24 hours.
Average transaction fees are currently around $23 with more complex smart contract operations or token swaps costing up to $55 according to Etherscan.
ETH price update
The asset itself has gained 7% in the past 24 hours and is trading at $3,636 at the time of press, according to CoinGecko.
It has just tapped its highest price since the Sept 7 market slump and has been gaining steadily for the past three days. Ethereum needs to clear resistance at $3,900 to make any more significant gains. On the downside, it should find support at $3,200.