Ethereum Destroyed $8.10 Billion in Ether, ETH Shortage Will Increase After Merger – Technology Bitcoin News

As per current metrics, the Ethereum blockchain has burned 2.35 million ether since the implementation of Ethereum Improvement Proposal (EIP) 1559. The $8.10 billion in value has been burned over nine months and over the last seven days, 18,110 ether worth $34.9 million was destroyed.

2.35 million Ethereum burned – Ethereum Dev says merger could happen in August

Approximately 288 days ago, Ethereum developers implemented EIP 1559, a ruleset update that basically changed the algorithm tied to the base rate per gas in the protocol and the network now burns the base rate per gas.

Since the London Update on August 5, 2021, after EIP 1559 was encoded in the code base and active, 2.35 million ether worth $8.10 billion in dollar value has been destroyed forever.

The day after EIP 1559 was implemented, Ethereum co-founder Vitalik Buterin explained that the change was “definitely the most important part of the [the] London [upgrade].”

During the last 24 hours, 2,396 ethers worth $4.63 million were burned. As of May 1, 2022, the network recorded the highest daily burn rate ever with 71,718 ethers worth $138.78 million. The second highest daily burn rate record was on January 10, 2022, when 19,424 Ethereum worth approximately $37.5 million was destroyed that day.

The biggest ethereum burner today is Opensea as the market burned 229,925 ether in 14,639,327 transactions. The gas used for ether transfers burned a total of 207,072 ETH, and the Uniswap V2 burned 131,457 ether.

While the London update EIP 1559 was a major protocol change, the next big change will be when the merge is applied. At that time, Ethereum will transition to a full proof-of-stake (PoS) network from its current proof-of-work (PoW) consensus algorithm.

Ethereum proponents are already gearing up for the merger as they suspect the change will be codified sometime this summer. Recently, on May 17, Ethereum-focused software company Consensys released an early access version of “Bonsai Tries”, which aims to be a few steps ahead of the official Merge transition.

Also, at the recent Permissionless conference, Ethereum developer Preston Van Loon he said the public can see The Merge implemented through August. Ethereum developer Tim Beiko recently explained that The Merge is likely to be released in Q3 2022. Beiko further explained that he “strongly suggests” that miners not invest in more mining rigs going forward.

Despite upcoming changes, Ethereum’s PoW hashrate was at the highest point in the network’s life on May 13, at block height 14,770,231. The burning of ethereum has simply become part of the protocol and many cryptocurrency proponents believe that ethereum will be ‘ultrasound’ money with the deflationary mechanism.

A simulation by The Merge indicates that after the transition, ethereum will become more scarce. Currently, the issuance rate of Ethereum is 5.4 million ethereum per year, and after the merger, the issuance rate will be only 500,000 ether per year. While current supply growth is 3.7% per year, after the merger it will be approximately 0.4% per year.

Amidst all these changes, Ethereum’s burning rate will be the same, estimated at around 900,000 ethers per year. However, significant spikes, such as the 71,718 ether burned on May 1, could greatly alter the estimates.

Marks in this story

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What do you think of the 2.35 million ether burned since August 5, 2021? How do you feel about the approach of The Merge? Let us know what you think about this matter in the comments section below.

Jamie Redman

Jamie Redman is the news lead for Bitcoin.com News and a financial technology journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source and decentralized applications. Since September 2015, Redman has written over 5,000 articles for Bitcoin.com News on the disruptive protocols emerging today.




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