London Hard Fork leads to deflationary effects and burns over 146,000 ETH per month

London Hard Fork leads to deflationary effects and burns over 146,000 ETH per month

The London Hard Fork from Ethereum has revolutionized the transaction fee model of the cryptocurrency and deflationary effects on the source of the tokens. On August 5, 2021, the upgrade was integrated into the Ethereum system and brought with it significant changes.

The Ethereum Improvement Proposal (EIP) 1559 A new fee system was implemented, in which part of the transaction costs, the so -called "basic fee", is burned. This ultimately removes the basic fee from the bloodstream and leads to a deflationary effect on the source of the tokens.

The effects of this method were remarkable. Over the period of 710 days, which corresponds to the upgrade, more than 3.46 thousand ETHs worth $ 6.68 billion were destroyed by combustion. This corresponds to an average monthly melting price of more than 146,000 ETH.

The deflationary trend of Ethereum compensates for the issue of new tokens and hinders the growth of the source by about 0.1% annually.

Various factors contribute to the Ethereum Burn. Regular ETH transmissions contribute the most to the source decline and led to the burning of almost 300,000 ETH. Uniswap V2 has also burned a considerable amount of ETH, especially during the switch to the London split and the transfer of Tether Stage Coins.

Other platforms such as Axie Infinity and Uniswap V3 also burned ETH, which further reduced the source of the token. At the same time, the amount of ETH that is enclosed in Ethereum grows through the Beacon deal. The value of this included ETH is currently over 26.87 thousand ETH, which corresponds to a dollar value of $ 51.35 billion. In summary, it can be said that the London Fork had significant deflationary effects on Ethereum's source. The combustion of the basic fee led to a decline in the source of the token, which in turn supports the ETH rate. ETH is currently being traded at a price of $ 1.903, which corresponds to an increase of 0.72% on the billing day.