At the current burn rate, over $800,000 worth of Ethereum (CRYPTO: ETH) is burned every 60 minutes.
What Happened: Data from Watch The Burn shows that 210 ETH is burned every hour, while the net issuance is around 400 ETH per hour.
This corresponds to a net reduction of 34.42% in Ethereum’s overall supply.
When network activity on the Ethereum blockchain increases, so too does the gas fee, which triggers a higher burn rate.
Before the implementation of Ethereum’s fee-burning mechanism, users would have to bear the burden of a higher base fee incurred when prior blocks in the network were full.
Overall, a total of 1.19 million ETH has been burned worth over $4.56 billion at the time of writing. Meanwhile, total net issuance is at 574,711 or $2.19 billion, giving rise to a total net reduction in Ethereum’s supply of 67.52%.
Why It Matters: “ETH is ultrasound money when fee burn exceeds issuance,” commented Ethereum researcher Justin Drake earlier this year.
ETH is ultrasound money when fee burn exceeds issuance.
— Justin Ðrake 🦇🔊 (@drakefjustin) March 1, 2021
Ethereum crossed the ultrasound barrier ~5 months ago, now cruising around ultraMach 2. pic.twitter.com/MhzcSb0bbi
Industry watchers like Ark Invest’s Cathie Wood have suggested that Ethereum’s value proposition as a venue for DeFi and NFTs makes it even more undervalued than Bitcoin (CRYPTO: BTC).
As of Wednesday morning, ETH was trading at $3,705.78, down 2.26% in the last 24 hours. The market-leading cryptocurrency BTC was trading at $46,827.39, down 0.22% over the same period.
Photo by Art Rachen on Unsplash
