Author : Mark
Date : Jan 22,2023
EIP-1559 proposes to delete a percentage of all Ethereum transactions
The Ethereum network is maintained by NFT and DeFi, particularly through OpenSea and Uniswap. The cost of Ethereum has risen during the last week.
The EIP 1559 protocol has been systematically destroying ETH since its debut in August 2021.
EIP-1559 proposes to delete a percentage of all Ethereum transactions, including NFT trades, yield strategy, and straightforward token transfers. All of it is being torched.
What impact does EIP-1559 have?
A total of 2.8 million ETH, or roughly $4.6 billion at today's values, have been taken out of circulation since the introduction of EIP-1559. According to an estimate by Ultrasound Money, over the previous week, the Ethereum protocol has destroyed more than 16,364 ETH at a pace of 1.62 ETH every minute.
Additionally, more ETH than is distributed to miners is destroyed as a result of this burn process. Supply growth has fallen to -1.06% annually from EIP 1559. So, compared to Bitcoin, which was hailed as the first stable money, Ethereum is more deflationary.
What will occur?
The only plausible scenario in which this prediction wouldn't come true is if ETH acceptance and usage take a sharp downward turn. Keep in mind that every network transaction burns ETH. NFT and DeFi activity has sustained Ethereum throughout the previous week. Due to these two categories, about 8,000 ETH have been lost this week. The primary causes of this were the market leaders in each category.
This measure sheds more light on the rivalry between USDT and USDC in the stablecoin market. Despite the fact that Tether's market cap is still much greater than Ethereum's, the latter's offering is to blame for burning more than three times as much of the latter.
In comparison to USDC transactions, which burnt around 228 ETH this week, USDT transfers used almost 705 ETH. In other words, USDT continues to be Ethereum's most extensively used stablecoin. The Ethereum community will continue to see it burn as network traffic picks up.