A very recent development which involves the burning of $88k Eth; over $150M worth, seems to be a great move towards a better Ethereum performance and experience.
Over the past few months, Ethereum has been undergoing a series of upgrades to improve performance and security and also to continue steps towards Ethereum 2.0. A few days ago on the 24th of June, the London hard-fork launched on the Ropsten testnet in preparation for the mainnet launch in July.
This current upgrade will usher in the implementation of the highly anticipated EIP-1559 modification that will adjust the Ethereum transaction fee calculation mechanism and in essence burn ETH.
A blog posted on the Ethereum website on the 18th of July detailed how the implementation process was going to take place. On the Ropsten testnet at block number 10,499,401 on June 24, the first testnet went live, on the 30th of June, the upgrade will go live on the Goeli testnet, followed by the Rinkeby testnet on the 7th of July 2021 and the mainnet date hopefully in July if there are no issues.
Changing of the fee auction structure and burning of the “base fee,” are the major features of the EIP-1559 implementation which will make Ethereum deflationary.
A website called Watch the burn (watchtheburn.com) has been set up to showcase the burn in action. At the time of press, 88,500 ETH has been burned on the testnet. This is equivalent to around $170 million at current prices.
Ethereum software solutions firm ConsenSys estimates that the annual supply change will be minus 1.6 million ETH. At current prices, this equates to the burning of $3.2 billion in ETH, which will reduce the annual supply rate by 1.4%.
Ethereum’s price has failed to react to this new development and is currently trading below the psychological $2000 support, this points to the fact that this development could have a good impact on the price of Ethereum,in the long term.
Source: Click here
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