With EIP-1559 activated, Ethereum inches closer to the status of deflationary asset
- 82.45% of network fee amount destroyed over last 30 days
- Ethereum is on its way to The Merge
Token Terminal, an on-chain analysis platform, has shared an infographic on Ethereum network fees and the effects that EIP-1559 is having on its supply.
82.45% of network fee amount destroyed over last 30 days
According to statistics shared by TokenTerminal, Ethereum (ETH) network users have paid more than $1,000,000,000 in equivalent for having their transactions added to Ethereum’s blocks.
Users of @ethereum have paid ~$1.0B in transaction fees over the past 30 days.
Of that ~$1.0B, 82.45% or ~$824M was burned* and thereby returned to $ETH holders.
*The burn mechanism is similar to a stock buyback because it decreases the amount of tokens in circulation. pic.twitter.com/FLzptAXM09
— Token Terminal (@tokenterminal) October 17, 2021
During the same period, more than $824,000,000 in equivalent were destroyed.
As covered by U.Today previously, in periods of high network activity, more Ethers are burned than created. Thus, there are some periods in which the Ethereum supply is deflationary.
This mechanism was actvated on Aug. 5, 2021, on Ethereum’s mainnet. By mid-October, more than 500,000 Ethers have been destroyed. This process reduces selling pressure and is oftenly treated as a bullish catalyst for the second cryptocurrency.
Ethereum is on its way to The Merge
The Ethereum 2.0 Merge, i.e., the transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus, has been activated in an interoperable devnet.
On Oct. 8, 2021, Ethereum core developers activated The Merge in a multi-client closed developer network with Besu, Erigon, EthereumJS, Geth, Nethermind, Nimbus, Lighthouse, Lodestar, Quilt, Prysm and Teku clients onboard.
As explained by Ethereum Foundation’s Tim Beiko, from Q4, 2021 – Q1, 2022, Ethereum’s Pithos devnet will be stress tested by Ethereum contributors and enthusiasts.