The Ethereum blockchain has achieved many different milestones since its inception many years ago. One recent change introduced the concept of burning transaction fees, effectively taking ETH out of circulation. That upgrade has burned over 1 million ETH, valued at over $4.24 billion.
Burning Over 1 Million Ether
Many people initially opposed the idea of having the Ethereum network burn the transaction fees. Those fees are offered to miners on top of the normal block reward, creating an incentive to include transactions as quickly as possible. However, Ethereum’s current technical limitations created concepts like “gas wars” and “selfish mining”, which are far from ideal. Although those concepts still exist today, it will only lead to the network burning more Ether and slowly deflating the supply.
The burning mechanism has achieved a crucial milestone in reducing the Ether supply. Over 1 million ETH has been burned to date, representing over $4.24 billion. That is a tremendous amount, representing nearly 1% of the current circulating Ethereum supply. While this burning rate is not sufficient to make ETH more scarce, it continues to create intriguing statistics.
Every DApp, DeFi solution, NFT transfer, transaction, or smart contract interaction on Ethereum requires gas. The more people sue Ethereum, the more the burning mechanism comes into the picture. Platforms like OpenSea and Uniswap V2 / V3 burned between 22,500 and 110,235 ETH. Interestingly, Uniswap V2 burns nearly three times as much Ether due to being less optimized yet still remaining relevant for many traders.
Interestingly, the overall ETH transfers contribute far less to this burning mechanism than one might think. Although they still added over 97,500 ETH to be destroyed forever, that is less than the OpenSea NFT marketplace and barely higher than Uniwap V2. It will be interesting to see if those rankings change in the coming months. The numbers are close together, so anything is possible.
Tether Drops Out Of The Top 3
Most people would expect to see Tether in the top 3 for protocols burning Ether. It is the most prominent issuer of stablecoins and resides primarily on the Ethereum blockchain. However, Tether has begun exploring other chains due to Ethereum’s high fees and congestion issues. That may explain why Tether “only” burned 54,104 ETH since the burning mechanism went live. It is still a good amount, but perhaps much lower than some think.
Further down the rankings, we see the likes of MetaMask, USDC Coin, Axie Infinity, 1Inch V3, and SushiSwap. DeFi enthusiasts had high hopes for SushiSwap dominating Uniswap on Ethereum over time, but that becomes less likely by the day. Even so, Uniswap is accessible on far fewer chains than SushiSwap, confirming the paths have diverged somewhat.