Ethereum burn rate could wipe out $5 billion a year

It’s been almost a week since the London update to Ethereum

was rolled out, and more than 20,000 ETH have been destroyed, giving analysts an estimated one-year burn rate. Sponsored The

highly anticipated Ethereum London hard fork was implemented last week

, on August 5. It introduced a new fee-busting mechanism as part of the restructuring of the gas auction system for transaction payments.

Between 25% and 75% of the base fee is now destroyed in an ongoing process that could transform the Ethereum ecosystem into a deflationary form of “ultrasonic money” once a proof-of-stake

is in place. Sponsored Sponsored

Over 20,000 Ethereum burned

According to ultrasound.money tracker

, the amount of ETH already burned in the last five days is 20,600 at the time of this writing. At today’s prices, this is worth about $64 million burned in less than a week.

The best Ethereum-based platform for burning fees is currently the OpenSea NFT marketplace. It has burned 735 ETH, or $2.3 million. Uniswap

v2 is next with 348 ETH burned, and another NFT platform, Axie Infinity, has removed 318 ETH, or nearly $1 million in transaction fees.

Etherchain reports a burn rate of 3 ETH per minute, taking an average of the last 24 hours. Extrapolating this equates to about 4,320 ETH per day, about 30,240 per week and 131,000 per month. On an annual basis, this could result in the burning of 1.57 million ETH – about $4.9 billion at current prices.

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Of course, all of these numbers are hypothetical, as fees will fluctuate with online demand, and prices are not static. What it shows is a snapshot of current conditions. These numbers could be much higher if Ethereum demand and prices increase over the next few years. And according to most analysts, that’s very likely.

The

$21 billion in staking

In addition to using ETH for trading, decentralized finance (DeFi) or creating non-convertible tokens (NFT), much of the money has already been placed on the Beacon Chain. The tokens are locked and untouchable until the “connection” props up ETH 1.0 with a blockchain proof-of-stake, where

ETH at the end of 2022.

At the time of writing, there was 6.8 million ETH on the Beacon Chain, according to ETH 2.0 Launchpad data. At current prices, this is worth around $21 billion – more than the entire market capitalization of Ethereum in April 2020.

This “ultrasonic money” narrative has been reflected in ETH prices, which have significantly outperformed Bitcoin this year. At the time of this writing, Ethereum was trading at $3115 and was up 5% on the day.

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