Record-breaking ETH Burn: Over $10 Million Worth of Ethereum (5336.77 ETH) Incinerated in a Single Day, Surpassing May 25th’s High.
Yesterday’s ETH Burn Reaches 5,336.77, Marking a New High Since May 25th
Milestone Reached: Ethereum Network Burns 3.4 Million ETH (Approximately $6.5 Billion) in a Single Day, as the Annual Net Issuance Rate Plunges to -3,352.67 ETH, Thanks to the EIP-1559 Coin-Burning Mechanism Implemented Nearly Two Years Ago.
On August 5, 2021, Ethereum underwent a significant upgrade known as EIP-1559, which introduced a transformative fee model. This Ethereum Improvement Proposal revolutionized transaction fees by incorporating a variable base fee that adjusts based on the prevailing demand for block space. This base fee is subsequently burned or permanently removed from circulation, effectively reducing the supply of Ether and contributing to a potential increase in token price.
Currently, Ethereum is issuing new Ether at a rate of 4% per year, but this rate is expected to decrease to around 0.5-1% as part of the Ethereum 2.0 upgrade. Speculation suggests that once this transition occurs, the burn rate of Ether may surpass the token issuance rate, turning ETH into a deflationary currency.
In May 2023, Ethereum experienced a surge in burn rates fueled by the meme coin craze triggered by the introduction of PEPE. At its peak, approximately 14,600 ETH was burned on May 5, resulting in the destruction of millions of dollars worth of coins. However, since then, the burn rate has witnessed a significant decline.
From May 5 to July 4, the daily amount of ETH burned decreased by over 64%, plummeting from 14,967 to 5336.77. This decline may be a contributing factor to the limited effectiveness of ETH’s supply-tightening strategy. Consequently, the price of ETH burn has fluctuated within the range of $1,930 to $1,960, failing to break out of the $2,000 range in recent weeks.
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