The cryptocurrency markets and the DeFi platforms are currently undergoing a stage of boom. During the last few weeks, the total market cap of the cryptocurrency market went from $2 trillion to higher than $3 trillion. This new development is the result of renewed bullish development among several top cryptocurrencies, including Bitcoin.
While the DeFi and the cryptocurrency market were growing at a rapid phase, Ethereum burned a massive amount of its circulating supply. According to reports, the silver cryptocurrency sent $4 billion worth of Ether tokens to the burn wallet. It is worth noting that the burning mechanism for Ethereum was first introduced in August this year.
New EIP-1559 Upgrade Pumped Ethereum Price
The secret to constant development and growth is the integration of new updates. The blockchain projects that have been able to keep adding new features to their ecosystem have managed to climb to the top 10 ranks on the cryptocurrency leader board. In the same manner, Ethereum decided to add a new update to the blockchain project to tackle the issue of the high transaction fees on the network.
This update dubbed EIP-1559 was added to the network in August, and it has allowed the mining fees to reroute. The amount of Ethereum tokens that used to go to the miners is now sent to a burning address. The $4 billion worth of Ether burned thus far since August is a result of the said update. According to the experts, the burned supply that can never go back into circulation has contributed to the price rally of Ethereum.
Crypto market analysts have pointed out recently that the Ethereum issuance rate has dropped down recently. Recently, around 93K Ethereum were distributed as rewards, and 86K Ethereum tokens were burned and taken out of circulation. These changes have made a direct impact on the price movement of the token, and Ethereum has proceeded to register two consecutive ATHs for the second week in a row.
The major factor contributing to the increased burning activity for Ethereum tokens is caused by an increased interest in the NFT, DeFi, and decentralization applications. As the trading volume and traffic increases on the Ethereum ecosystem, the transaction fees also keep rising steadily. Currently, the gas fees are set as high as 150 GWEI that was criticized for being unreasonably inflated by the investors a few months ago.