Ethereum Update Has Burned Nearly $70 Million of Currency

The adjustment in the Ethereum (ETH) blockchain network has already burned around US$ 68 million in tokens until this Thursday morning (10), according to information from the site etherchain. In total, more than 21,000 ETHs have been destroyed in a week since Ethereum Improvement Protocol No. 1559 (EIP-1559) went into effect on August 5th.

Also known as the ethereum network’s Hard Fork London, the update aims to provide clearer pricing on transaction fees paid. According to the adjustment, this process will be managed by an automated bidding system with a defined rate value that varies according to network congestion.

To carry out the change, the blockchain transaction processing mode was changed. From the mining of block 12,965,000, a fraction of the fee that would be paid to the miners is sent to an inaccessible address, that is, it is “burned”.

What are the impacts of burning ethereum?

Ethereum burning tends to value cryptocurrency in the long run.  (Source: Pexels/Jievani/Reproduction)Ethereum burning tends to value cryptocurrency in the long run. (Source: Pexels/Jievani/Reproduction)Source: Pexels/Jievani/Reproduction

The EIP-1559 is aimed at strengthening the ethereum ecosystem, known for its smart contract capabilities that power DeFi, or decentralized finance, applications and NFTs, among other things. However, there is likely not to be much short-term impact on investors.

In the long run, however, the proposal could make the ETH deflationary, reducing supply. This would be beneficial to investors, especially as the ethereum would become more attractive than traditional currencies such as the dollar, which are subject to inflation and therefore losing their real value.

Immediately, the burning of Ethereum has stirred up the memes on Twitter.