Massive Ethereum Burn, 2 Million ETH Worth Rp86 Trillion Gone From Circulation

A total of 2 million ETH had to be burned. (Photo; Kanchanara - Unsplash)

JAKARTA – As much as 2 million Ethereum was successfully destroyed from circulation through the burning mechanism carried out by the ETH developer. This is an effort to improve the Ethereum Improvement Proposal or EIP-1559 which has been submitted since 2021. The 2 million ETH automatically disappeared from circulation.

The OpenSea NFT Marketplace built on the Ethereum network is the biggest contributor to the burning process. This was followed by ETH transfers, Uniswap exchange platform, StrongBlock, Tether, and others.

Data reports from Watch the Burn reveal that the Ethereum network has already destroyed over 2 million ETH. All of them are worth almost 6 billion US dollars or around IDR 86 trillion. That means the supply of the second largest cryptocurrency after Bitcoin has experienced a massive reduction.

EIP 1559 is arguably one of the most popular upgrades on the Ethereum blockchain. The deflation-inducing cost-burning proposal was implemented last summer as part of the London hard fork. In the last seven months, most ETH has been reduced.

EIP-1559 divides transaction fees on the network, previously assigned to miners, into a base fee and a tip. While the base fee is destroyed, the tips are given to the miners, as reported by Dailycoin.

Ethereum will then transition from a Proof of Work (PoW) consensus mechanism that allows mining to a Proof of Stake (PoS) consensus mechanism that provides staking capabilities. This transition is planned to be carried out in the second quarter of 2022.

If the plan is successfully implemented, then PoW will be discontinued. In addition, all blocks on the blockchain are rumored to be produced using a PoS network.