In a Twitter post on Wednesday, the blockchain research firm CryptoRank revealed that over 1 million Ether (ETH) worth $ 4.24 billion had been burned since the introduction of the EIP-1559 protocol in August as part of the London fork. The EIP-1559 protocol reformed the Ethereum network’s transaction fee market, modifying the gas fee cap and introducing a burn function that takes a portion of the transaction fees out of circulation on the blockchain, to be canceled permanently.

Notable decentralized applications responsible for token-burning contributions include the popular non-fungible token platform, or NFT, and the NFT game, Axie Infinity. Below, the transaction volume of decentralized exchanges, such as Uniswap, 1inch and Sushiswap, it made up a large part of the ETH burn. ETH is also burned from transfers of stablecoins such as Tether (USDT) and USD Coin (USDC) that operate on the Ethereum blockchain. Lastly, MetaMask wallet users and those who conduct regular ETH transactions also contributed to most of the network activity.

According to data from Ultra Sound Money, 7.67 ETH is burned every minute, and up to 11,042 ETH is burned every day. At the current rate, approximately 4 million ETH tokens are burned each year. However, the blockchain currently issues around 5.4 million ETH a year. Therefore, the Ethereum network remains inflationary on a net basis.

This is all about to change next year as the Ethereum 2.0 update will go live sometime next year, moving the network from a proof-of-work consensus to a proof-of-stake consensus. , in which the rewards for staking will be much lower than the rewards for mining. As a result, it would reduce the blockchain’s emission rate well below its burn rate, thus creating a deflationary ecosystem. Ultra Sound Money projects that the ETH supply peak will reach 119.7 million in early 2022 before going into decline.

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