Over $100 Million of Ether Burnt in Less Than a Week

Following the activation of the EIP-1559 upgrade a little over a week ago, traders and analysts are expectant that the protocol would make ETH deflationary since burning reduces supply and availability.

Now, it appears that EIP-1559’s deflationary properties are becoming more evident, according to Ultrasound.money report, nearly 300,000 Ether has been burnt.

When ETH burns on the protocol are massive than the mining reward, the block produced is deflationary. This means that the ETH supply has decreased temporarily, and according to Carbano, there are currently more than 1,040 deflationary blocks.

Per ETH Burn Bot tweet Tuesday, Ether annualized issuance hit negative thanks to burns coming in at -3 percent, which is now between 1.6 to 2.5 percent. Previously, it was around $8.15, according to YCharts.

However, the current deflationary move is temporal; permanence is expected to hit when Ethereum blockchain transitions to a proof-of-stake system of ETH 2.0 by 2022.

While the cut in the money supply of ether is massive for HODLers, and satisfies a promise from the London hard fork, the recent spike of activity on the ethereum blockchain has hiked gas fees for transactions.

Per data from Dune Analytics, the average gas fees for a transaction hit $20 before normalizing back to around the sub-$1 mark Wednesday. Despite this spike, gas fees are still down 44 percent from the previous year. 

Ethereum is currently trading at over $3,200, according to CoinGecko, up 4.5% on day.

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