Over 310,000 ETH worth over $1 billion has become unusable since Ethereum implemented its “London Hard Fork” system upgrade six weeks ago.
The “burning” process began on Aug. 5 when the Ethereum London Hard Fork upgrade was deployed and with it the long-awaited EIP-1559. The upgrade altered the transaction fee mechanism to do away with the auctions and make gas calculations more predictable while burning a portion of the network fee.
Data from Watchtheburn confirmed this with figures, as it indicated that since the activation of London Hard Fork, over 297,000 ETH, worth more than $1 billion, had been burned on the network.
The milestone figure also was observed by EthHub and Daily Gwei founder Anthony Sassano who tweeted on Sept 16 that the amount of ETH burned had surpassed 300,000.
This new burning mechanism introduced by the London Hard Fork has been effective as a deflationary tool, reducing the network’s inflation rate.
Initially, Ethereum miners would receive about 13,000 ETH produced daily; however, the new mechanism has been able to fight this, reducing the ETH produced daily and increasing the ETH burned. Currently, ETH burned has overtaken the amount produced daily.
According to DelTec bank, the company behind Ethereum-based altcoin Tether (USDT), “The London Hard Fork has meant that the network is now burning thousands of ETH, which immediately changes the inflation dynamic of the potential 18 million Ether per year creation. Previously there was a fear, that eventually the supply of ETH could outpace demand, creating a never-ending supply and sending its value to zero. With the new change, the variable base fee system has lowered the number of ETH created by not paying the miners the total fee and forever removing it from the network by burning.”
Ethereum has seen its price surge 29% since the implementation of the hard fork, according to CoinGecko data.
London Hard Fork is a vital step for the network, which is planning to move from a proof-of-work (PoW) network consensus to a proof-of-stake (PoS) network consensus aimed at saving the network from near-paralysis and reducing the amount of energy needed to execute transactions on the network as the PoS is known to consume far less energy than the PoW.