Since the activation of EIP-1559 in the London hard fork on August 5, 2021, the Ethereum network has burned more than 4.5 million ETH, with a current market value exceeding $15.3 billion at Ether's price of around $3,400. This mechanism permanently removes the base fee from circulation, making it one of the most notable supply experiments in crypto.
Burn Breakdown
According to ultrasound.money data, a total of 4,523,479.74 ETH has been destroyed as of December 21, 2024. On-chain transfers lead the burn sources with 369,578.08 ETH (8.17%). OpenSea NFT minting activities account for 230,051.11 ETH (5.08%), Uniswap decentralized exchange burns 225,723.78 ETH (4.99%), and Tether (USDT) transfers on Ethereum destroy 205,458.95 ETH (4.54%).
How EIP-1559 Works
EIP-1559 does not simply send ETH to a null address; instead, the base fee portion of each transaction fee is automatically and irretrievably deleted by the protocol code. The fee structure consists of a base fee (burned) and a priority fee (paid to validators). This design links the burn rate directly to network activity: higher congestion leads to more burning, and vice versa.
Deflation Still Elusive
Despite the massive burn, Ethereum remains inflationary. Since the London fork, the network has added 3,245,017.99 ETH to circulation, resulting in an annual inflation rate of 0.820%. The reason is that new issuance from staking rewards consistently exceeds the burn rate, especially after the Shanghai upgrade enabled unstaking. Should network activity surge or issuance adjust, deflation remains a possibility.
It is important to note that EIP-1559 was primarily designed to improve fee predictability, not to achieve deflation. The burn was a secondary effect, but it has undeniably added a scarcity narrative to ETH. With the growth of Layer2 scaling and Ethereum's application ecosystem, base layer burns could increase further, potentially driving inflation toward zero or negative.