The London hard fork, introduced on August 5, 2021, made it possible to pay Ethereum (ETH) fees using burned ether, which was unavailable until that point.
It’s worth noting that the term “burning ETH” refers to the act of permanently deleting units of Ethereum’s supply. This, in theory, would restrict the supply or quantity of ETH in circulation, which is the goal of the hard fork London, which includes EIP-1559.
Since August the burning is reaching record highs, which apears to be linked to the expansion of decentralized finance (DeFi) platforms and the trading of non-fungible tokens (NFTs).
Indeed, a new record was set on January 10 for ETH being burned according to statistics from the Watch the Burn web portal, which recorded a total of 19,424 ETH burned in a single day. Notably, the previous all-time high was more than 16,000 ETH, which was reached in mid-October of 2021.
Ethereum burned per day. Source: WatchtheBurn
Growth of DeFi platforms
In general, DeFi platforms are becoming more popular with Alex Svanevik, the CEO of Nansen, a site that specializes in gathering statistics about Ethereum sharing several graphs on his Twitter account, in which it can be seen that platforms such as Uniswap (in its versions 2 and 3), and OpenSea had created the most amount of gas expenditures in 2021, according to the data.
Even though OpenSea came in second position for most gas consumption in 2021, according to the report published by Defiant, it was the platform that recorded the most ether burned in 2021, with 2,755 ETH torched since the activation of EIP-1559 in August.
Gas consumption OpenSea. Source: Nansen
NFTs also contribute to ETH burning
The growing interest in NFTs has resulted in greater activity in Ethereum. As a result, marketplaces such as OpenSea, which is a market for buying and selling the collectible tokens, have had to pay fees as a result of the increased demand.
According to statistics, the month of January, which has not yet ended, is already one of the busiest month for OpenSea’s NFT trading, with record highs being reached as shown by Dune.xyz data on trading in OpenSea, in the growth curve below.
Monthly transaction log in OpenSea. Source: Dune.xyz
As previously stated, the launch of EIP-1559 happened in early August, a period that coincided with an increase in the number of transactions on NFT’s buying and selling platform.
Since August (which corresponds to the activation of the EIP-1559), these growth figures have shown how OpenSea has recorded the largest commission gas consumption in 2021.It is reasonable to assume that these record highs in ETH burning are just the beginning, and that much larger statistics will be witnessed in the future.
Following the previously specified total of 19,000 ETH burned in a single day, excessive levels of burning have been seen to persist it. Illustrating that there is a considerable degree of activity on this network, despite the hefty fees that Ethereum continues to charge for its transactions.