Over the past week, Ethereum is burning hotter than ever.
As part of EIP (Ethereum Improvement Proposal) 1559, which launched in August 2021, the protocol is heavily consuming ETH (cryptographic term for destruction).
Per EIP-1559, all Ethereum transactions are partly discarded. Part of all NFT transactions, yield strategies and even simple token transfers. It’s all torched.
A total of 2.8 million ETH has been removed from circulation since EIP-1559 was implemented. That’s roughly $4.60. a billion at today’s prices.
Over the past seven days, the Ethereum protocol has destroyed over 16,364 ETH at an estimated rate of 1.62 ETH per minute, according to Ultrasound Money.
This burn mechanism also means that more ETH is discarded than issued to miners. Since EIP 1559, supply growth has now slowed to -1.06% per annum. sound Money (hence the use of ultrasonic money memes by ETH heads).
The chart below shows how the network’s token supply changed at various checkpoints and upgrades. The dotted line indicates that the deflationary trend is expected to continue over the next two years.
The only real reason this prediction will not be met is if ETH adoption and usage falls off a cliff. Remember: ETH is burned with every transaction on the network.
As such, you can use this burn rate as another way to measure network adoption.
So which use category (as defined by Ultrasound Money) is leading adoption on Ethereum? NFTs When DeFi Activities fueling the flames of Ethereum.
These two categories were responsible for destroying nearly 8,000 ETH this week, with market leaders in each category, OpenSea (~1,298 ETH) and Uniswap V3 (~876 ETH), being the primary drivers. .
This indicator gives us a little more insight into the stablecoin battle between USDT and USDC. We all know that the market cap of the former still far exceeds the market cap of the latter, but Tether’s offering is also responsible for more than three times the amount of Ethereum burning as he did.
USDT transfers burned about 705 ETH this week, while USDC transfers burned just 228 ETH. In other words, USDT continues to lead the usage when it comes to stablecoin adoption on Ethereum.
As network activity continues at a rapid pace, the Ethereum community continues to see it burn up.
