The net Ethereum burned $100 million in ether (ETH) since implementing a transaction burn mechanism in their recent London update.
According to the tracking website WatchTheBurn, about 32,500 ETH have been destroyed so far since the update happened last Thursday (5).
This amount represents about half of the ethers that were issued in this period to miners as a reward for creating new blocks and processing transactions. More than 62,000 ETH ($194 million) were issued in one week.
THE London update contained a change called EIP-1559, focused on simplifying the base rate transaction process. He divided the fees into two: base fee, which is burned, and a priority fee, which serves as a tip to the miner.
The base rate is generated based on the size of previous blocks and is designed to increase when demand is high and decrease when demand is low.
It will act as a recalibration mechanism to accommodate the changing demand for blockchain space. The base rate is burned and can no longer be used on the network — adding a deflationary element.
The priority rate is similar to the previous type of rate. It goes directly to the miner and rewards them for transaction processing — in addition to the 2 ETH you get for mining the block.
It can be used to get the attention of miners to give priority to a specific transaction.
Burning off a portion of the transaction fees reduces Ethereum’s miners’ income. This is likely to happen unless priority rates are high enough to represent pre-upgrade transaction rate levels — a fact that results in higher rates for users.
The update also doubled Ethereum’s maximum block size. Blocks can now accommodate transactions that, in total, contain up to 30 million in “gas” instead of the previous limit of 15 million.
This was created to help the network during periods of high demand. Despite this change, the base rate was created to bring the block size below 50%.
At this time, ether is being traded to US$3.1 thousand.
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