Over 500,000 ETH Have Now Been Burned on the Ethereum Blockchain

According to Etherchain.org, over 500,000 Ethereum (ETH) have now been burned on the Ethereum blockchain. At the time of writing, the burnt amount is worth $1.7 billion. Formerly, the same amount in ETH would have been received by miners.

EIP-1559 Introduces Burning Mechanism

Following the implementation of Ethereum Improvement Proposal (EIP) 1559 in early August, the fee-burning mechanism became effective on the Ethereum network.

Read Also: Raoul Pal Reveals Why His Crypto Portfolio Is 70% Ethereum (ETH) and 5% Bitcoin (BTC)

After the implementation, the miners’ fee that was previously used to reward miners for moving transactions was changed to a base fee. Now, miners can only be rewarded at users’ discretion via a tip, while the base fee is burned continuously.

With an increased number of transactions on the Ethereum network on a daily basis, more coins are getting burned, which increasingly makes Ethereum a deflationary asset with more coins burned than distributed.

Read Also: Ethereum Foundation Confirms Date of First-Ever Ethereum 2.0 Upgrade Named Altair

Market Effect of the Fee-Burning Mechanism

As the number of coins present on the Ethereum network is constantly decreasing with the presence of a fee-burning mechanism, it is expected to have a positive effect on the price of the digital token ETH in the market.

With constantly reducing supply and fast-rising demand, traders and investors are liable to accumulate an asset while expecting a price increase. This has been the case for Ethereum (ETH) in the market.

With Ethereum’s 26% growth in October, the effect of the feed-burning has clearly been positive. After the implementation in August, Ethereum (ETH) experienced over a 20% surge in price but later lost its surging momentum.

Read Also: Big-Money Investors Are Dumping Bitcoin (BTC) For Ethereum (ETH) –JPMorgan Analyst

At the time of press according to CoinMarketCap, ETH is trading at $3,517.30, with a relatively 2% price upsurge in the last 24 hours.

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