17 Sep 2021 12:21 PM +00:00

Ethereum Burn Rate: Over $1 Billion in ETH Burned Since London Hard Fork

Ethereum's EIP-1559 update went live last month, marking a huge shift that introduces hefty burn fees. But how much ETH has been burned?

The EIP-1559 upgrade was part of the London Hard Fork that occurred on August 5 at block 12,965,000. It is part of the wider Ethereum upgrades as the network heads towards the Ethereum 2.0 release.

Here's a look at Ethereum's current burn rate.

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Ethereum Burn Rate

Ethereum's current burn rate over the past 24 hours is 3.55 ETH/min (as of September 17), seeing over $12,4000 in ETH burned every minute.

On August 6 - the day after Ethereum's hard fork, the burn rate was 3.10 ETH/min, translating to roughly $8500 in ETH at its previous pricing.

Many analysts perceived this burn rate as inflated due to a transaction backlog from the upgrade. However, as we have seen in the month after the hard fork, the burn rate remains high.

As of 11:11 BST on September 17, 311,554.11 ETH has been burned, totalling $1,096,097,212.56 (via Etherscan).

Is Ethereum Deflationary?

For Ethereum to be deflationary, over 2 ETH needs to be burned each block. This is because 2 ETH is minted per block mined.

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However, this will not be a regular occurrence. In the time since EIP-1559 went live, most blocks have burned under 1.5 ETH.

A few deflationary blocks - those that burned more than they minted - have popped up since. As pointed out by Péter Szilágyi, the team lead at Ethereum, block #12965263 was the first deflationary in history. It has already been listed multiple times as an NFT on OpenSea.

According to Bankless, Ethereum will not become deflationary under EIP-1559, but will have a net inflation rate of 1.26-2.66%. If the inflation rate is at the lower end of that percentage, it may drop below bitcoin's inflation level of 1.17%.

However, Bankless also suggests that when Ethereum switches over to staking via Proof-of-Stake, its inflation rate could hit -1.05%, making it deflationary.

Read More: How Nahmii 2.0's L2 Solution Seeks To Solve Ethereum's Scaling Problems