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$5.7 Billion Ethereum Was Burned With $6 Million Removed From The Market Daily

Almost $6 billion in Ethereum was burned as $6 million was removed from circulation every day. Despite the massive drop in gas fees, the network was still able to burn a significant amount of Ether, enough to halve net issuance.

Following the implementation of the Ethereum burn mechanism, the supply of the second largest cryptocurrency dropped to over two million ETH, at an all-time high the asset would be worth nearly $10 billion.

The main reason behind the implementation of EIP-1559, which contains a burning mechanism, is the transfer of power from the hands of Ethereum miners to the hands of future validators. The update changed the fee structure and added the concept of a “fee base”, which reduces transaction costs on the network.

Despite the initial desire to reduce average transaction costs, the surge in the DeFi and NFT industries caused a spike in gas fees, increasing the cost of some transactions by more than $100 in time. network is congested.

Ethereum becomes deflationary

After the first month of the burning mechanism, the Ethereum network created the first deflationary block that brought less ETH to users than the amount of ETH burned at the time.

The deflation of the second largest cryptocurrency is a long-awaited event in the market, as it will most likely cause an increase in the value of the asset despite a decrease in the total supply.

Immediately following the implementation of the burn mechanism, ETH introduced the Ethereum 2.0 staking contract, which has gained immense popularity and recently celebrated a major milestone of 10 million ETH locked in the contract.