The popularity of the PEPE meme currency has resulted in a high burn rate on the Ethereum (ETH) network. Following the popularity of the meme currency, others have attempted to replicate it. As more coins are launched, the volume has increased, and the Ethereum network’s new proof of stake algorithm has been driven into overdrive regarding burning fees.
Meme currencies have risen to prominence in the crypto world over the past month, and the increased volume has unwittingly contributed to an increase in the ETH burn rate. To put this in context, statistics from Ultrasound Money, a website devoted to Ethereum’s post-Merge activity, indicate that a total of 561,656 ETH has been burnt since the Merge 231 days ago.
Zooming down to a shorter time frame of 30 days reveals that approximately 130,852 ETH was destroyed in one month. This indicates that around 23% of the total ETH burnt so far was burned in the past month, prompted by increased network activity.
In general, the more activity there is on the Ethereum network, the higher the bids for block space. This increases gas expenses as customers rush to have their transactions validated as soon as possible. The more ETH is consumed, the higher the bids for block space. Repeat as necessary.
The greatest burning occurred on Uniswap, the network’s largest decentralized exchange. According to Ultrasound Money, transactions on the DEX have burnt around 32,800 ETH in the previous 30 days.
This increased burn rate has not abated, with over 45,000 ETH burnt in the previous seven days. Consequently, the burn rate is currently 4.53 ETH per minute, with a 3.47x issuance offset rate.
Even in 2021, Ethereum has always led the meme coin trend. This time was no exception, as the network currently controls the great bulk of the meme currency volume. As a consequence, the 24-hour traffic on the network has risen to $1.12 billion.
Because of its scale, Ethereum is also the favoured network for many new projects, with PEPE, WOJAK, and TURBO debuting in the previous month. These currencies alone have generated nearly $3 billion in trade activity and are still growing. If the present trend continues and gas prices stay high, ETH fee burning will likely increase. This would imply that more ETH would be removed from circulation, which would be incredibly positive for the price of ETH in the future.
