In the last few months, Ethereum network has witnessed a flurry of activities instigated by the NFT and DeFi wave. Now, the latest report from on-chain data provider, TokenTerminal shows that more than $1 billion in Ether have been expended as gas fees on the network by users. Token Terminal’s data also suggests that about 82.45% of the same amount has been burned over the same period.
$824 Million Worth of Ether Burned Within 30 Days; Ether Supply Keeps Declining
According to the on-chain data provider, the amount that has been burned is over $824 million pointing to a surge in activities on the network over the past 30 days since more burned Ether equals more spent ether. The burning mechanism on the Ether is the outcome of a recent upgrade named EIP-1559 which is aimed at making the largest altcoin a deflationary asset. Given this, the circulating supply of Ethereum reduces as more Ether is burned. Ether’s supply cap is not definite.
Within the first two weeks of the EIP-1559 upgrade in August, over 100,000 ETH had been burned. Now, by mid-October, the number of burned Ether is more than 500,000. One advantage of the burning activity is that it reduces the selling pressure on Ethereum as most people especially miners on the network believe that burning translates to more price increase for the coin. Experts have agreed with this point, noting that a corresponding demand for Ether as its supply reduces is a bullish catalyst for its price.
Ethereum Nears ‘The Merge’
The proposal for a transition to the Proof-of-Stake consensus model from the PoW consensus had been approved for Ethereum earlier in the year. A huge step has been taken to implement the transition- an interoperable devnet has been activated by developers on the network. Earlier this month, Ethereum core developers activated The Merge in a private developer network shared by many clients such as Lighthouse, EthereumJS, Besu, Nethermind, Quilt and a host of others.
According to the Ethereum Foundation, the devnet will span the remaining part of this year and the first quarter of 2022 and will be stress-tested by its partners and Ethereum enthusiasts. By the time the transition is complete, there will be no need for miners on the network, or rather, they will be known as validators and the mathematical puzzle they usually have to solve to add transactions to blocks will not be available anymore. Instead, they will validate transactions via staking. Eth 2.0 staking is ongoing; the minimum staking amount is 32 ETH. To effect this change on the network, mining difficulty will keep increasing throughout this year and next year until the transition is complete.
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