About 288 days ago, Ethereum developers implemented the EIP-1559 update, which changed the algorithm tied to the underlying gas fee in the protocol.
Following its launch, 2.35 million Ethers worth $8.10 billion were permanently wiped out in the codebase.
On May 1, 2022, the network saw the highest daily burn rate of 71,718 ethers worth $138.78 million. The second such record was set on January 10, 2022, with 19,424 ethers worth about $37.5 million destroyed that day.
By far the biggest ether “burner” is the NFT platform Opensea, with 229,925 ethers burned in 14,639,327 transactions, Uniswap V2 burned 131,457 ethers.
The next big change is an update to The Merge, which will move Ethereum to the Proof-of-Stake (PoS) algorithm from the current Proof-of-Work (PoW) consensus algorithm.
Modeling by The Merge indicates that there will be fewer Ethereums after the transition. Ethereum’s current issue rate is 5.4 million ETH per year; after the Merge, the issue rate will be only about 500,000 ethers per year.
While the current supply growth is 3.7% per year, it will drop to about 0.4% per year after the Merger.
Despite all of these changes, the etherium burn rate will remain the same at about 900,000 ethers per year. However, significant spikes, such as the 71,718 ethers burned on May 1, will affect the valuation.