More than $1.096 billion in Ethereum (ETH) has been burned in the past month, according to blockchain data from Nansen Analytics released on Tuesday. With the introduction of EIP-1559 last August, a portion of the fees are deducted from trading for every transaction that takes place on the Ethereum blockchain. While sending and receiving ETH is not expensive, higher-level tasks such as embossing non-fungible tokens or NFTs using smart contracts require a lot of gas.
In January, the total volume of NFT transactions in OpenSea reached a record high of $3.5 billion. He is currently at the top of the Ultra Sound Money leaderboard with 65,778 ETH ($181.7 million) burned in the last 30 days. In the second and third positions, the token was burned by Ethereum and Factivity transactions on the decentralized exchange Uniswap (UNI), with 35,696 ETH ($98.6 million) and 24,223 ETH ($66.9 million) respectively.
However, Ethereum remains a highly inflationary blockchain network; The current issuance of 5.4 million ETH annually exceeds 3.5 million ETH burns. The supply of ETH will only peak once the proof-of-work mechanism is removed through the transition to Proof of Stake or PoS.
When this happens, the total amount of new issuance will be less than when burning tokens, resulting in net deflation. The POS change, referred to as the “merger”, will take place in the second or third quarter of this year. However, before that, the total network hashrate managed to reach a new historical maximum. The Ethereum Foundation recently dropped the name Eth 2.0 in a rebrand. Now it is called the consensus group.