Since Ethereum (ETH) Ethereum Improvement Proposal (EIP) 1559, there is already almost half a million ether destroyed. This together has a value of no less than 1.5 billion euros! At the current rate, nearly 3 million ether will be destroyed each year. However, Ethereum is still not deflationary.
EIP 1559 makes transaction fees on Ethereum’s cryptocurrency network more stable and predictable by introducing a base rate. Where users of the network previously had to bid against each other and miners could choose the highest bid, this is now different.
The base rate is automatically destroyed after every transaction, the destruction of tokens is known in the industry as a “token burn.” Since the update, nearly 500,000 ETH has been destroyed. Many were looking forward to this update as it could make Ethereum deflationary in some cases.
This means that the stock of ETH is getting smaller, which would be positive for the value of the altcoin. At the moment, however, that is not yet the case. The stock is still growing at about 2.2% per year. At the time of writing, 5.4 million new Ethereum is released every year. 2.7 million of them are destroyed every year.
Ethereum is expected to switch to the new proof of stake (PoS) network can become deflationary in some cases. This would be especially at times when the network is very busy.
The non-fungible token (NFT) market is currently the party destroying the most ETH. NFTs are extremely popular and NFT marketplace OpenSea does a lot of transactions. That marketplace accounted for the destruction of 11.3 million ETH in the past 7 days. In second place, we find regular ethereum transactions between wallets, which brought 6.6 million ETH to their end. Finally, decentralized exchange (DEX) Uniswap is in third place with 3.5 million ETH.