According to the reports, Ethereum’s EIP-1559 update has now accumulatively burned more than 1 million ETH tokens, which is worth about $4.3 billion, only three months from when it launched. Ultrasound.money’s data report implies that Ethereum is burning roughly 6 ETH per minute, with Uniswap V2-based trades as the primary contributor, having burned 100,000 ETH alone. ETH transfers and the OpenSea NFT marketplace come in as the second and third most prominent burners, respectively.
As part of last August’s London hard fork, the particular Ethereum Improvement Proposal aimed to render on-chain transaction costs more predictable by imposing a base fee. This base fee represents the minimum required gas in order to add a transaction to a block. However, arguably the most critical aspect of the introduced EIP is that the base fee gets burned with every successful transaction, thus, reducing the total supply of ETH.
While the update has resulted in significant gains for ETH in terms of its global price value, jumping to new all-time highs following its launch, some of the blockchain’s most loyal proponents have now started questioning its approach. They argue that even though ETH has indeed skyrocketed in value due to the massive burning, its costly gas fees remain unchanged, practically locking out those outside of Ethereum who may be interested in going in.