$ETH.X extended its rally today and traded above $3,700 for the first time since May. The second-largest crypto by market value soared on optimism around NFTs and its new deflationary “coin burning” economics. 🔥
Coin burning is a process by which tokens or coins are purposely removed from circulation. Burning reduces the total supply of coins, which theoretically makes an asset more scarce.
According to crypto intelligence platform OKLink, Ethereum burned 12,000 ETH on Tuesday, a record for coins destroyed since the implementation of the EIP 1559 update on Aug. 5. The EIP 1559 has destroyed nearly 160,000 $ETH.X (about $559 million) since activation.
The ongoing NFT hype (which mainly happens on the Ethereum blockchain) has also contributed to Ether’s bullish run. In August, leading NFT marketplace OpenSea hit $3.08 billion in trading volume.
Some analysts believe that $ETH.X got a boost from the launch of Arbitrum One, an Ethereum “layer 2” solution. Layer 2 helps users transact on a chain separate from Ethereum’s core blockchain, making transactions faster and cheaper. Arbitrum’s mainnet went live yesterday and is expected to supplement existing layer 2 scaling chains like Polygon Network.