Ethereum EIP-1559 Update Burns 1.8 Million Tokens Since August

Recent reports show that the Ethereum (ETH) EIP-1559, which got launched last August as part of an effort to upgrade the network’s scalability, has now facilitated over 1.8 million token burns (worth $5.2 billion at press time) since its introduction.

The EIP-1559 update came with a feature that allowed the burning of tokens to give Ethereum a deflationary status. This burn system oversees the fractional “burning” of ETH tokens on every transaction, thereby permanently removing a small number of coins from the circulating supply and fostering deflation.

Over the past six months, the network has recorded at least 1.85 million coins getting burned due to the new update. A significant amount of this burning occurs on large Ethereum-based DeFi platforms, including Uniswap, Curve, 1inch, and OpenSea, which dominate a significant porting of on-chain transaction activity.

According to recent data from the ETH analytics platform, watchtheburn, Ethereum issuance has dropped by 70.3% since the launch of the EIP-1559 update, which has dramatically slashed the potential of inflation on the ETH supply. Occasionally, this figure has dropped by 100%, meaning that ETH achieved deflationary status, even for a short period.

While 1.8 million ETH might seem like a lot to go down the drain, however, this figure represents only 1.5% of the total supply.

Key Ethereum Levels to Watch — February 18

ETH/USD has fallen to its lowest point since early February, as the prevailing market sentiment flips bearish again. The second-largest cryptocurrency has now breached the 4-hour 200 SMA at $2,850 and pushes for the $2,750 area.

The renewed bearish market tone comes following the growing Russia-Ukraine tensions, which triggered a global risk-flight by investors into safe-haven assets and currencies. That said, this bearish sentiment could dissipate a bit as we head into the weekend, where macroeconomic activities usually go unnoticed by the market.

Meanwhile, my resistance levels are $2,900, $3,000, and $3,100, and my support levels are $2,800, $2,750, and $2,650.

Total Market Capitalization: $1.81 trillion

Ethereum Market Capitalization: $336.6 billion

Ethereum Dominance: 18.5%

Market Rank: #2