$54M ETH burned: Ethereum records first deflationary day

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TL;DR Breakdown:

  • The number of ETH burned exceeded the total coins issued yesterday.
  • This is the first time Ethereum produced a negative issuance in a full day. 

The third day of September 2021 marks the first full day Ethereum blockchain turned deflationary amid the EIP-1559, which was deployed about 30 days ago. By being deflationary yesterday, it means that the number of ETH burned was greater than the total coins issued through block rewards. 

Over $54 million ETH burned

A total of 13,838 ETH were burned yesterday, which is equivalent to $54 million in accordance with ETH price at $3,906 during the time of writing. This number of ETH burned is over 2 percent higher than the total coins issued in block rewards throughout the last 24 hours.

Technically speaking, Ethereum recorded a negative daily ETH issuance on September 3, which has been termed as its “first deflationary day.”

Token burning is a mechanism used to deflate the supply of the cryptocurrency. By burning tokens, they are moved to a wallet that isn’t or won’t be controlled by anyone. ETH burning was introduced to the Ethereum blockchain following the successful implementation of EIP-1559 in the London hard fork.

Meanwhile, the record today doesn’t mean the Ethereum blockchain has become fully deflationary since the total ETH burned is lesser compared to the issuance since EIP-1559 launched. However, it is worth noting that EIP-1559 has significantly helped to reduce the ETH inflation rate.

More ETH burned amid spike in fee

An increase in Ethereum gas fees prompt a spike in the number of ETH burned per minute, as proposed in EIP-1559. On Friday, Cryptopolitan reported a spike in Ethereum gas fees, which raised the normal ERC-20 token transfers fee to over $147. This somewhat explains why more coins were burned than issued yesterday. 

At the moment, the burn rate has slightly dropped to 8.62 ETH per minute, according to data tracked by Ultrasound Money. 

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Ibiam Wayas

Written by Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.