Exploring the Impact of EIP-1559 with 4 Million ETH Burned Post-London Upgrade
Since the London upgrade in August 2021, Ethereum has actively reduced its supply, burning over 4 million ether (3.2%), as reported by ultrasound.money.
This reduction stems from the adoption of Ethereum Improvement Proposal 1559 (EIP-1559), which altered fee calculations and introduced a burn rate tied to network activity. EIP-1559 aimed to level out fees, enhance predictability, and burn ether, with more than 3% of the current supply affected. Despite the “ultrasound money” meme speculating deflation, the network has seen more ether created than burned since the London hard fork, possibly due to Ethereum’s migration to L2 platforms like rollups.
The ongoing relevance of EIP-1559 remains crucial, maintaining ether’s supply inflation rate close to 1% annually. This reflects Ethereum’s evolution and the intricate dynamics of its ecosystem, particularly amid the migration from L1 to L2 platforms. The protocol’s ability to adapt to changing demands underscores its resilience and potential to address scalability concerns while ensuring network sustainability.
Clever Robot News Desk 12th February 2024
