{"id":469125,"date":"2021-08-12T23:00:58","date_gmt":"2021-08-12T23:00:58","guid":{"rendered":"https:\/\/wncen.com\/?p=469125"},"modified":"2021-08-12T15:44:32","modified_gmt":"2021-08-12T15:44:32","slug":"ethereum-fee-burn-is-important","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/ethereum\/ethereum-fee-burn-is-important\/","title":{"rendered":"Ethereum Fee Burns Clocks $100 Million, Here\u2019s Why The Burn Is Important"},"content":{"rendered":"
The Ethereum network has now continuously burned base fees for a week straight and in that time frame, the amount of ETH burned has hit $100 million. With over 32,000 ETH burned in the space of seven days. The fee burn rate fluctuates given the network traffic, but the burn continues regardless. Depending on network traffic going forward, the burn rate is predicted to hit 4 ETH per minute very soon.<\/p>\n
Related Reading |\u00a0Ethereum Set To Explode According To Market Dominance, Crypto Analyst<\/a><\/strong><\/em><\/p>\n The rate at which the ETH is burned currently sits at around 3.38 ETH per minute. This puts the current burn rate at over $10,000 burned per minute. The burn shows that the EIP-1559 upgrade is working as intended, which in the long run will hopefully make the nature of ETH deflationary. But that is not happening just yet. The burning of the base fee is still in its early stages, although it is working smoothly.<\/p>\n It will take a while for the rate at which new ETH is burned out of circulation to be high enough that ETH\u2019s supply becomes deflationary. But that remains to be the end game here. And this is why the burn is so important to the network.<\/p>\n Related Reading |\u00a0Here\u2019s What Happens To All Of The Crypto Assets The IRS Seizes<\/a><\/strong><\/em><\/p>\n The fact that Ethereum does not have a capped supply like bitcoin means that an unlimited number of ETH can be put into circulation. This is one feature that ETH has in common with fiat, the unlimited supply. It is one of the main reasons why the move to ETH 2.0 is so important to the network.<\/p>\n The ETH burn is basically taking away a huge chunk of ETH that miners would have been given for mining blocks and \u201cburning\u201d the coins. EIP-1559 introduced a base fee mechanism that is determined by the wallet where a transaction is generated and this base fee would be burned. Then the owner of the wallet where the transaction is generated can then add a \u2018tip\u2019 to a transaction if they want their transaction to be included in a block faster, basically leading to faster confirmation times.<\/p>\n Related Reading |\u00a0Why A Shocking Altcoin Season Could Be On The Horizon<\/a><\/strong><\/em><\/p>\n In just a week, 32,000 ETH has been burned. This 32,000 ETH would have formerly been added directly into circulation as it is given as a reward to miners. But now, this amount that would have added to supply has been completely taken out of the equation.<\/p>\n For now, it may seem like miners are getting the short end of the stick with this, but ETH potentially becoming deflationary is a win for the market as a whole. Less supply would make ETH coins more valuable, which, in turn, would drive up the price of the asset.<\/p>\n ETH price has had an interesting run these past three weeks. The asset price which had broken below $2,000 last month experienced a price surge that sent the price surging past $3,000 this month. Ending a two-month-long streak of a painful downtrend.<\/p>\n <\/p>\n Following the launch of the EIP-1559 saw the Ethereal network become even more popular amongst investors. And as the popularity of the network grew, so did the popularity of its native token, ETH. With more investors coming into the market, the value of the asset has skyrocketed. Although now there has been a bump in the road as a dip in the price has sent ETH barreling back down below $3,100.<\/p>\nPutting Less ETH Into Circulation<\/h2>\n
Ethereum Price Going Forward<\/h2>\n
ETH price dips as the week draws to a close | Source: ETHUSD on TradingView.com<\/a><\/pre>\n