500,000 Ethereum have now been burned

Half a million Ethereum have been burned on the Ethereum network, according to Etherchain. At the time of writing, the "burned" amount equals $ 1.7 billion.

If they did not burn, the same amount would have been taken by the Ethereum miners and would have been absorbed by the market.

How Ether combustion works

With the EIP-1559 update, the charging mechanism has been implemented on the Ethereum network. Since August, the miners' pay, previously used to reward miners for transporting transactions, has changed to a basic fee. Now, the pay for the miners is presented as a "tip," while the introductory price is burned.

With the growing number of transactions on the Ethereum network daily, more and more currencies are being burned, making Ethereum a deflationary asset with more coins minted than distributed.

What effect does this have on the market?

While the number of coins in the network is constantly declining with the current charging mechanism, it is expected to positively affect the price of Ethereum. 

With supply constantly dropping and demand rapidly rising, traders and investors amass an asset while expecting prices to rise.

ETH / USDT pair Source: TradingView

The result has already been reflected in the price of Ethereum, with a 26% increase in October 2021. Immediately after its update, the cost of Ethereum increased by more than 20%. 

At the time of writing, Ethereum was trading at $ 3,580, up 4.9%.

This article is for informational purposes only and does not replace specialized consulting services with professional experts.