It’s been two months since the London Hardfork upgrade went live on the Ethereum network and according to data from Ultrasound Money, the Ethereum network burned approximately 503,000 ethers.
With Ether currently priced at $ 3,600 at the time of this writing, the dollar value at the time of this writing is approximately $ 1.81 billion.
The Ethereum network’s burn rate rose to 5.2 ethers per minute in October, a month in which Ethereum has so far bounced back by around 20%.
The hard fork upgrade
A hard fork occurs when there is a major change to the protocol of a blockchain network that leads to a different division between the old protocol and the newer version. In a hard fork, the miners have to decide whether they want to further validate the old or the new blockchain.
The London Hard Fork is the latest upgrade and includes five new Ethereum Improvement Proposals (EIPs), all of which are temporary until the permanent Ethereum 2.0 update. One of the improvements is EIP-1559, a proposal for the introduction of a “basic charge” that tracks gas tariff prices across the Ethereum network to ensure accurate predictions of gas tariffs for network users. It also gives deflationary features to the Ethereum network, giving the network the ability to burn gas fees.
Token Burns, when it comes to cryptocurrency, refers to sending an otherwise usable token (or a fraction of it) to an unusable account. Burning effectively removes tokens from the available supply, increasing their relative scarcity.
According to Ultrasound Money, an Ethereum network tracker, OpenSea, the popular NFT marketplace for Ethereum networks is responsible for most of the burns on the network, which is around 14.84% or 74,660 ETH. This is equivalent to about $ 269 million.
Aside from OpenSea, ETH transfers account for 44,130 ETH, or about $ 159 million, and Uniswap V2 accounts for 27,380 ETH, or about $ 99 million, which come in second and third respectively. The popular play-to-earn platform Axie Infinity ranks 6th with 12,580 burned ETH or around 45.3 million US dollars.
The London hard fork is a major upgrade for the Ethereum network in its quest to move from a proof-of-work (PoW) network consensus to a proof-of-stake (PoS) network consensus aimed at getting the network off close by – paralysis and reduces the amount of energy needed to carry out transactions on the network, as the PoS is known to consume far less energy than the PoW.