Home Crypto Ethereum: $1 Billion Has Been ‘burned’ Since London Update

Ethereum: $1 Billion Has Been ‘burned’ Since London Update

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Last August, the Ethereum network finally completed the “London” update, responsible for introducing improvements and the long-awaited “tax burn” mechanism (EIP-1559). Since then, the deflationary measure has discarded approximately 300,000 ethers (ETH), equivalent to about US$1.09 billion, or R$5.47 billion in direct conversion—virtually tripling the last record in just 18 days.

Part of the rise in the burn rate can be explained by the increase in demand for the Ethereum network itself, which is facing a new season of issuing non-fungible tokens — the controversial NFTs. With about 1.2 million transactions per day, the cryptocurrency also sees an increase in fees charged as an incentive for miners, as well as their eventual disposal.

In this context, the measure proves to be effective in combating inflation and network congestion. As an example, just check the net emission of ethers: last Wednesday (15), miners produced around 7.28 thousand units of the cryptocurrency, while another 6.23 thousand were burned in the same period. Simply put, in other words, it is suggested that the smaller the supply of the asset, the greater its value in the future, if its demand also continues to grow.

ETH is currently trading above the $3,500 floor, where it consolidates before challenging the $4,000 barrier again. Considered the representative of alternative cryptocurrencies to Bitcoin, the network now seeks to become more sustainable in relation to the environment with the “Ethereum 2.0″ update, eliminating one of the main criticisms against its valorization. However, the news is still a promise for next year.

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