The London upgrade from Ethereum went well and Ethereum mastermind and founder Vitalik is confident that the merging of Ethereum 1.0 with version 2.0 will succeed. The foundations for the change to Proof of Stake have now been laid, it is “proof that the Ethereum ecosystem is able to bring about significant changes.” With Ethereum 2.0 including Proof of Stake and Sharding, two big ones are to be solved : The high energy consumption of the network (mining) is to be reduced drastically by 99 percent, and shardchains are to create many more transactions per second than before.
The end of the mining business at Ethereum is already becoming apparent with the London upgrade. Because the London upgrade included EIP-1559, which has now introduced a new fee scheme for transactions – and also means that part of the newly created ETH will not be distributed to miners, but will be destroyed. As a result, fewer new ethers are entering the market, observers expect a deflationary effect and rising ETH prices in the medium to long term (less supply, more demand).
Ether gets an additional push after the London upgrade
Where the token burns take place
There are already websites that track the ETH burns. According to Etherchain.org, more than 3,800 ETH have been destroyed so far – at a rate of around 2.65 ETH per second. Converted according to the current status, these are tokens with the equivalent of more than 6,000 euros, which fall victim to the burn process per second. According to the current status, around 9 million euros of ETH are destroyed every day.
The regular token burns at Ethereum will have a significant impact on the total amount of Ether in the future. So far it has been the case that the amount of ETH has increased steadily since the start of the network in 2015. Initially, 5 ETH were created per new block, today it’s only about 2 ETH. According to calculations by the analysis site ultrasound.money, this growth will continue to level off until the ETH crowd finally reaches a zenith with the switch to Proof of Stake. After that, the amount of ETH will even shrink due to the token burns and level off at around 119 million tokens.
At ultrasound.money you can finally see where most of the token burns take place. The NFT marketplace OpenSea, the decentralized exchange Uniswap, the blockchain game Axie Infinity and the stablecoin Tether are leading. All of them are of course decentralized applications on the Ethereum blockchain – which shows how intensively they use Ethereum to run their dApps.
The London upgrade was introduced especially for these developers. “Now it will be much easier to send a transaction that will be included in the next block, and that is very important for the user experience,” says Vitalik Buterin. Up until now, transaction prices have often fluctuated significantly – now the Ethereum blockchain and its costs should become much more predictable, especially for providers of dApps.
Ethereum’s switch to energy-saving proof of stake is taking longer than planned