What happened: On Monday a total of 3,837.13 Ether (CRYPTO: ETH) worth $6,112,779, based on the current value of Ethereum at time of publication ($1,593.06), was burned from Ethereum transactions. Burning is when a coin or token is sent to an unusable wallet to remove it from circulation.
Why it matters: On August 5th, 2021, the Ethereum blockchain implemented an important upgrade known as EIP-1159. This Ethereum improvement proposal changed the fee model drastically. Now each transaction includes a variable base fee that adjusts according to the current demand for block space. This base fee is burned, or permanently removed from circulation, lowering the supply of Ether forever.
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See Also: How to Buy Ethereum & When Will Ethereum 2.0 Launch
Ethereum is currently issuing new Ether at a rate of 4% per year, although this is expected to decrease to around 0.5-1% as a part of the Ethereum 2.0 upgrade. Once this occurs, many speculate that the burn rate of Ether will be greater than the token's issuance, causing ETH to become a deflationary currency.
The net annualized issuance rate for Ether yesterday was -4.35%.
Data provided by Glassnode