The Ethereum upgrade and the new EIP-1559 mechanism went live starting August 5th and have burnt transaction fees, which at press time amounted to 13,186 Ethereum, or over $40 million.
The “EIP-1559” mechanism, one of five upgrades offered as part of the Ethereum fork called “London,” has replaced the auction-style transaction fee mechanism as an alternative to Ethereum fees determined by algorithms.
Unless users specifically choose to “tip” the miners, miners will no longer receive transaction fees, as instead, the fees are burned, reducing the total supply of Ethereum in circulation.
According to Ultrasound.money data , 13,200 ETH have been burned so far which originated from various transactions on the Ethereum blockchain.
500 ETH has burned in the last 24 hours in the OpenSea non-fungible token market, with trading volumes soaring since the CryptoPunks trading frenzy began last week.
The second largest burnt Ethereum belongs to the decentralized exchange Uniswap V2, with 1,065 ETH transactions since the burn began.
The third biggest burn is Axie Infinity, an Ethereum-based game where players buy NFTs from monsters and fight them against each other.
This game burned 845 ETH.
Ethereum upgrade and consolidation stage:
The London split from Ethereum may have completely changed the way miners are compensated but more change is yet to come.
Soon, Ethereum will transition from a Proof of Work mechanism to a Proof of Stake mechanism.
Next on the Ethereum agenda is “Merge,” which connects the Ethereum mainnet to the Ethereum 2.0 chain.
That is when the current Ethereum blockchain is linked to the next generation of the network.
Vitalik Buterin, co-founder of Ethereum, told Bloomberg earlier this week that the London upgrade is proof that the Ethereum ecosystem is capable of making major changes, and that it certainly makes me more confident about the consolidation.
Consolidation is also pivotal to the allocation of Ethereum, which is supported by Ethereum 2.0.
About 5% of all Ethereum is currently included in Ethereum 2.0.
This means about 6.5 million Ethereum, which is worth about $20 billion.
Nansen CEO Alex Svanek told last month that this number is likely to rise after the merger because investors will be able to withdraw their Ethereum.
The Ethereum Foundation is planning for a post-merger cleanup upgrade to allow the Ethereum stack to be withdrawn, and expects to do so very soon after the merger is complete.
Prices may be affected as a result of the option to unlock the Ethereum offering allotted in the Ethereum 2.0 contracts.