Months ago, the London hard fork introduced the burning of ether (ETH) in the payment of Ethereum fees. Now, this burning is at record highs, which appears to be related to the growth of decentralized finance (DeFi) platforms and non-fungible token (NFT) trading.
According to data from the Watch the Burn web portal, a milestone was marked on January 10, since a total of 19,424 ETH was recorded burned in a single day. At the time, the historical maximum was over 16,000 ETH, achieved in mid-October 2021.
According to The Defiant portal, the high burning rate is related to the growth in the use of DeFi platforms. This informative page quotes Alex Svanevik, CEO of Nansen, which is a portal specialized in collecting data on Ethereum.
The businessman showed on his Twitter account some graphs in which it is observed that platforms such as Uniswap (in its versions 2 and 3), and OpenSea, were the ones that had generated the most gas expenses in 2021.
As The Defiant article shows, even though OpenSea was in second place as the platform that consumed the most gas in 2021, it was the one that registered the most ether burned in 2021 with 2,755 ETH destroyed. This since the activation of EIP-1559 in August.
It is worth clarifying that “burning ETH” refers to the action of destroying units of this cryptocurrency forever. Theoretically, this will reduce the supply or amount of ETH in circulation, being a deflation strategy, whose objective is proposed in the London hard fork, which includes EIP-1559.
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NFTs also influence the burning of ETH
The growing interest in NFTs has increased activity on Ethereum. This brought with it the consequent payment of fees by marketplaces, among which OpenSea stands out , a market for the sale of collectible tokens.
Some data shows that January, which is not over yet, has been the busiest month for OpenSea NFT trading, posting all-time highs.
An interesting point, Dune.xyz’s data on trading on OpenSea shows, is the growth curve. As we already highlighted in the text, the start of EIP-1559 occurred in early August, a date that coincidentally coincides with the increase in transactions within the NFT buying and selling platform.
These data on growth since August (date that coincides with the activation of EIP-1559), show how OpenSea registered the highest commission gas burn in 2021,
It can be assumed that these all-time highs in ETH burning are just the beginning and that higher numbers will be seen. After reaching the aforementioned 19 thousand ETH destroyed in one day, high levels of burning continue to be marked. This shows a high level of activity on this network, even despite the high fees that Ethereum still records.
