Ethereum’s EIP-1559 Yields Over 2.57 Million ETH Burned In The First Year

It has been slightly over a year since the Ethereum network started burning ether from transaction fees. The change was met with great enthusiasm, and the EIP-1559 upgrade has proven beneficial. With over 2.5 million ETH burned in the first year, it will be exciting to see if that trend continues. 

Substantial Yearly Amount of ETH Burned

Many people assumed the change to EIP-1559 would prove beneficial at first and slowly taper off over time. After all, burning ETH spent on gas fees is a sensible decision for a currency without a hard supply cap. It wouldn’t necessarily make Ethereum deflationary immediately, but it did create an intriguing future outlook. A year after its activation, the proposal has substantially impacted the network. 

Statistics-wise, EIP-1559 burned 2.57 million ETH. That is a steep number and one that surpassed most people’s expectations. Even with Ethereum’s network fees coming down substantially, the network continues to take ETH out of circulation. Moreover, the change, enforced at the protocol level, does not require users to make any big changes. Everything occurs automatically, making for a welcome overall network addition.

The burning of 2.57 million ETH represents $8.47 billion in value. That number would have been much higher without a very bearish period affecting all cryptocurrency markets. The ETH price dropped to the low $900 range not that long ago, coming from an all-time high of over $4,000. Although the market has rebounded in recent weeks, the lower fees may result in a slower burning of value from here on out. Additionally, the Merge is slated for September 2022, which will have an interesting network impact. 

Overall, it is safe to say the EIP-1559 upgrade delivered on its promise. It has taken a steep amount of ETH out of circulation forever and shows how burning transaction fees can be worthwhile. Although not every network needs such a solution, it has certainly proven intriguing to long-term ETH holders and supporters. Where things will head from here on out is difficult to predict, but the burn will continue either way.

OpenSea and Uniswap Dominance

Diving into a bit more detail, OpenSea contributed the most to burning ETH. The leading NFT marketplace burned over 350,000 ETH, ranking it well ahead of “general network transfers” with 237,700 ETH burned. Those are very solid numbers, although one might have expected some other projects near the top of the list. Uniswap, with V3 inching ahead of V2, helped burn another 284,000 ETH, further illustrating that DEX’s popularity on the Ethereum blockchain.

Tether comes in fifth place with 112,600 ETH burned, more than double USDC’s contribution of 48,100 ETH. Other notable names on the list include Otherdeed (56,000 ETH), MetaMask (51,100 ETH), ENS (28,600 ETH), and Shiba Inu (21,100 ETH). Even Wrapped Ether (WETH) burned over 19,000 ETH, which is interesting. 

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JP Buntinx

JP Buntinx has been writing about cryptocurrency since 2012. His interest in crypto, blockchain, fintech, and finance allows him to cover a broad range of different topics.

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JP Buntinx

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