Amount of Destroyed Ethereum (ETH) Reaches 66,000 in 2023, Here’s What’s Next

In 2023, the total amount of destroyed Ethereum (ETH) coins has reached a stag­ger­ing 66,000 ETH, worth approx­i­mate­ly $117 mil­lion at the cur­rent price of $1,780 per coin. This sig­nif­i­cant reduc­tion in sup­ply is expect­ed to alle­vi­ate some of the pres­sure on the sec­ond-largest dig­i­tal asset in the mar­ket and make it increas­ing­ly scarce. With the present burn rate, an esti­mat­ed 614,000 Ethereum will be removed from cir­cu­la­tion annu­al­ly, which, at the cur­rent price, equates to an astound­ing $1.09 bil­lion.

The Ethereum net­work under­went a cru­cial update in August 2021, known as the Lon­don Hard Fork, which intro­duced the Ethereum Improve­ment Pro­pos­al (EIP) 1559. This pro­pos­al led to the imple­men­ta­tion of a base fee mech­a­nism that burns a por­tion of trans­ac­tion fees. Since then, the Ethereum net­work has been steadi­ly destroy­ing coins, reduc­ing the over­all sup­ply and cre­at­ing defla­tion­ary pressure.

The ongo­ing burn has a direct impact on the Ethereum ecosys­tem, as it reduces the total num­ber of coins in cir­cu­la­tion. This reduc­tion in sup­ply, com­bined with increas­ing demand for the dig­i­tal asset, has the poten­tial to dri­ve the price of Ethereum high­er. The cur­rent burn rate of approx­i­mate­ly 614,000 ETH per year fur­ther high­lights the mag­ni­tude of the change brought about by EIP-1559.

It is essen­tial to con­sid­er that the burn rate can fluc­tu­ate based on var­i­ous fac­tors, such as the num­ber of trans­ac­tions on the net­work and the gas fees asso­ci­at­ed with them. As Ethereum moves toward Ethereum 2.0, a proof-of-stake (PoS) con­sen­sus mech­a­nism, the net­work is expect­ed to become more effi­cient, which could impact the burn rate and its influ­ence on the market.

In con­clu­sion, the grow­ing annu­al burn rate of Ethereum has led to a sig­nif­i­cant reduc­tion in the over­all sup­ply of the dig­i­tal asset, mak­ing it increas­ing­ly scarce. As the total amount of destroyed coins sur­pass­es 66,000 ETH, the mar­ket dynam­ics are expect­ed to evolve, with the poten­tial for increased demand and high­er prices. Investors and traders should keep a close eye on the devel­op­ments in the Ethereum ecosys­tem and the fac­tors influ­enc­ing the burn rate, as these could play a cru­cial role in shap­ing the future of the dig­i­tal asset.