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Ethereum Has Burnt $67.3 Million in Transaction Fees Since the London Hard Fork

CryptocurrencyAug 11, 2021 04:30AM ET
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Ethereum Has Burnt $67.3 Million in Transaction Fees Since the London Hard Fork

  • Ethereum is currently burning tokens from transaction fees, as the Ethereum Improvement Proposal (EIP) 1559 was activated during the London hard fork.
  • More than $67 million in ETH have been burned since the London hard fork on Thursday
  • The completion of the London hard fork means that Ethereum is on the path to its next step: the merge.
  • The series of recent events has seen Ethereum break the $3,000 mark, to trade at $3,138.95.

The London Hard fork was one of the most anticipated events, not just for the Ethereum community, but for the entire cryptoverse. The upgrade saw Ethereum developers implement changes to the network that burn transaction fees.

Ethereum Is Burning the Ether! But Why?

The Ethereum Network will now burn every transaction fee; meaning miners will no longer receive transaction fees. The transaction fees on every transaction on the Ethereum will now be burned, thus, reducing the circulating supply of the Ether.

48 hours after the London hard fork was completed on August 5th, Ethereum’s new transaction fee-burning mechanism, EIP-1559, had burned approximately $30 million in ETH from the network’s circulation.

According to Etherchain, the EIP-1559 is currently operating at a burn rate of around 2.1 Ethereum per minute. In total, more than 21,400.5 ETH, or approximately $67.3 million have been burned up to this point.

The Ethereum Improvement Proposal (EIP) 1559, was launched along with four other upgrades during the London hard fork. The EIP-1559 is a replacement for the previous auction-style transaction fee mechanism that was in use on the Ethereum network.

Ethereum’s London hard fork has completely changed the way miners are compensated on the blockchain, but more changes are yet to come. Miners will no longer receive transaction fees unless members “tip” them.

On The Flipside

  • While the EIP-1559 is a step in the right direction for Ethereum, there have been some notable downsides since it went live.
  • Since August 5th, the Average fees on Ethereum have increased slightly, from 0.003 ETH, to 0.005 ETH.
  • There have also been dramatic changes on blocks that are being mined on the network, with drops as extreme as going from 100% to being empty.

What Is Next for Ethereum?

With the completion of the London hard fork, the stakes are raised for Ethereum, with the next major step being the “merge.” During this stage, Ethereum will connect its mainnet to the Ethereum 2.0 beacon chain.

The event will finally see the Ethereum network transition from its current proof-of-work system into a proof-of-stake consensus mechanism. Ethereum 2.0 is so anticipated that around 5% of all ETH, or 6.5 million ETH tokens, is currently staked in ETH 2.0.

After the completion of the London hard fork, Vitalik Buterin, the co-founder of Ethereum, said that it is “proof that the Ethereum ecosystem is able to make significant changes,” and it has made him even more confident about the merge.

Ethereum and the Markets

Since the completion of the London hard fork, ETH has been in outstanding form. On the 4th of August, before the upgrade, ETH had been trading at $2,508.54, however, a strong climb following the hard fork has seen Ether break past $3,000 for the first time since May.

ETH has continued its strong performance and is up by 3.5% over the last 24 hours. At the time of writing, Ether is now valued at $3,138.95 with a market cap of $367.2 billion, which is second only to Bitcoin.

Why Should You Care?

The London hard fork has changed the way miners are compensated on the Ethereum network. Soon, the merge will bring changes to everybody on the Ethereum network at large.

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Ethereum Has Burnt $67.3 Million in Transaction Fees Since the London Hard Fork
 

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