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$1 million worth of ETH has already been burnt since the London hardfork and the implementation of EIP-1559 this morning.
EIP-1559 Makes ETH Ultrasound Money
A significant milestone already crossed as the changes to the fee structure of Ethereum have already resulted in $1 million being burnt. Block after block, ETH part of the transaction fees paid to miners are burnt, deflating the supply of Ethereum. In the meantime, the price of ETH has jumped more than 6% in the last hour.
A few deflationary blocks have already been seen as the amount of ETH burnt is higher than the block rewards (2 ETH).
So far, some of the biggest ETH burners have been Uniswap, OpenSea, and Tether. The first on the leaderboard, though, is a mysterious $LONDON Gift project which seems to be dedicated to celebrating the London hardfork.
To understand how EIP-1559 works and what it means for Ethereum in the future, a recent interview with Ethereum researcher Justin Drake goes over most of the changes and what they mean for the network.
While a sustained rate of >2 ETH per block is necessary to see Ethereum’s supply deflate, EIP-1559 is the first step on Ethereum’s road to a deflationary monetary policy. While the current proof-of-work consensus mechanism still sees Ethereum pay miners more than 12,000 ETH every day, experts believe proof-of-stake will see validators receiving around 1,000ETH every day. At that point, assuming similar network usage, Ethereum will truly be deflationary.
Disclaimer: The author held ETH at the time of writing.