The Ethereum network has reached a major turning point after burning one million coins on the blockchain since the launch of the fee- burning mechanism provided in the EIP-1559 update.
The current release of Ethereum remains at a slightly more than two Ethereum coins, meaning that the assets have not yet reached the long-awaited reduction and the network is still issuing higher coins than the number burned.
The fee- burning mechanism was introduced in EIP-1559, that started operating in August. The network has spent just three full months burning $4.2 billion worth of coins. Due to the NFT and DeFi industries, the burn rate of the network has been constantly increasing, which has led to the result that the community sees today.
Prior to the upgrade, the Ethereum fee structure was working in favor of cryptocurrency miners which were receiving high fees during network downtime. In some cases, users had to pay up to $80 for just one transaction.
With the implementation of the new fee-burning mechanism, the fees that used to go to the miners are now burned out of the supply circulation, that sometimes leading to the emergence of a “deflationary block.” Each deflationary block issues less Ethereum than previously burned.
Overall, the market has shown a positive reaction to the implementation of this burning mechanism, which has led to a 74% growth from October 1 to November 9. After reaching the most last ATH, Ethereum has gone down by 11% because of the global cryptocurrency market correction.
In the Previous week, the price of Ethereum has been ranging from about $4,100 to $4,200, compared to other major cryptocurrencies moving with less than the previous week.