Ethereum’s long-awaited update, Eth2, is on the horizon – and recent tests indicate that users can expect it as early as this summer.
However, while the masses have been waiting for Eth2, Ethereum has received some other updates to “hand hold” the network to its destination. One of those updates has helped the network burn over 2 million Ether.
As reported by Watch the Burn, a dashboard that monitors token burn mechanisms, the network has destroyed over 2,000,996 $ETH.X, which is equal to $5.82 billion.
Token burns involve permanently removing tokens from circulation. The goal is to decrease the number of tokens available, thereby theoretically increasing the price of the token. In Ethereum’s case, the network burns a portion of the fees that previously went to miners – effectively removing it from circulation. This change was proposed in EIP-1559, which was added to the network in the London hard fork in August 2021.
These changes will have a longer-lasting effect on the Ethereum blockchain once Eth2 launches. That’s because the network will likely become deflationary after its pivot off its proof-of-work (PoW) consensus mechanism. By adopting the new, more environmentally friendly proof-of-stake (PoS) mechanism, Ethereum should also see a reduction in transaction fees and greater scalability.
According to news reports, Ethereum’s network will be upgraded in Q2 2022. At the time of writing, $ETH.X was trading around $2,900, a 15% increase from the previous week.
If you want to know more about Eth2, read our previous newsletter here. You can also read the difference between PoW and PoS here.