Ethereum's EIP-1559 update went live last year, marking a huge shift that introduces hefty burn fees. But how much ETH has been burned?
The EIP-1559 upgrade was part of the London Hard Fork that occurred on August 5 at block 12,965,000. It is part of the wider Ethereum upgrades as the network heads towards the Ethereum 2.0 release.
Here's a look at Ethereum's current burn rate.
Ethereum Burn Rate
Ethereum's current burn rate includes the latest stats highlighting nearly 1,825 ETH has been burned in the past 24 hours. Moreover, approximately 13,026 ETH has been unlocked as rewards in the past 24 hours.
On August 6 - the day after Ethereum's hard fork, the burn rate was 3.10 ETH/min, translating to roughly $8500 in ETH at its previous pricing.
Many analysts perceived this burn rate as inflated due to a transaction backlog from the upgrade. However, as we have seen in the month after the hard fork, the burn rate remains high.
As of 17:39, PM GMT+5.30 on September 1, 2022, 2,546,912 ETH has been burned worth $4,117,965,130
Read More: Ethereum Vs Ethereum 2.0: Will Ethereum 2.0 Replace Ethereum?
Is Ethereum Deflationary?
For Ethereum to be deflationary, over 2 ETH needs to be burned each block. This is because 2 ETH is minted per block mined.
However, this will not be a regular occurrence. In the time since EIP-1559 went live, most blocks have burned under 1.5 ETH.
According to Watch The Burn, 2,610,489 ETH has been created since the EIP-1559 launch, while 2.6 million ETH has been destroyed. (May, 2022)
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A few deflationary blocks - those that burned more than they minted - have popped up since. As pointed out by Péter Szilágyi, the team lead at Ethereum, block #12965263 was the first deflationary in history. It has already been listed multiple times as an NFT on OpenSea.
According to Bankless, Ethereum will not become deflationary under EIP-1559, but will have a net inflation rate of 1.26-2.66%. If the inflation rate is at the lower end of that percentage, it may drop below bitcoin's inflation level of 1.17%.
However, Bankless also suggests that when Ethereum switches over to staking via Proof-of-Stake, its inflation rate could hit -1.05%, making it deflationary.
Furthermore, a tentative date for the great Ethereum merge has been announced. If everything goes well, Ethereum will now be transitioning from its proof of work to proof of stake consensus on September 19.