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Over 4,000 ETH Burned, Removing $7M From Circulation

A substantial amount of Ether, valued at $7M, was recently burned, signifying a decrease in its supply.

A substantial 4,135.98 Ether (CRYPTO: ETH), valued at $7,005,075 based on Ethereum's current value at the time of publication ($1,693.69), has been "burned" or removed from circulation. This was achieved by sending the Ether to an unusable wallet.

The relevance of this action can be traced back to a significant upgrade implemented on the Ethereum blockchain on August 5th, 2021, known as EIP-1159. This Ethereum Improvement Proposal revolutionized the fee model. Each transaction now involves a variable base fee that adjusts based on the prevailing demand for block space. Notably, this base fee is "burned" or permanently removed from circulation, resulting in a perpetual decrease in Ether supply.

As of now, new Ether is being issued at a 4% rate per annum. However, with the forthcoming Ethereum 2.0 upgrade, this rate is projected to reduce to approximately 0.5-1%. When this happens, it's speculated that Ether's burn rate will surpass its issuance, leading to Ether becoming a deflationary currency.

As per the latest data, the net annualized issuance rate for Ether was -4.20% yesterday, indicating that more Ether was burned than issued.