Analysis: ETH Burn Rate Post EIP 1559 9/15/21

In this article I will analyze the state of Ethereum in regards to its newly added deflationary protocol, the Ethereum Improvement Proposal (EIP) 1559 from the month of August into September.

According to Dune Analytics over 297,277 ETH has been burned/destroyed as of September 15, 2021. This equates to $1,009,527,752 dollars being destroyed by the deflationary protocol.

Next let’s analyze Ethereum transaction fees and the relation between fees earned by miners and fees burned.

Here we see:

• The total emited fees in purple

• Earned fees in orange

• Burned fees in white

• Burn rate in black

We see that the burn rate spikes on August 5th (the deployment of EIP 1559) and stays relatively stable until the end of August where it gradually increases. This coincides with price increases of Ethereum along with the increased popularity of NFTs during this time. The burn rate appears to stabilize on 9/7 which coincides with the flash crash the entire crypto space suffered on that day.

Next lets take a look at ETH average gas fees during this time.

Here we see:

• Average gas price in blue

• Base gas fee in orange

A dramatic spike in average gas price and base gas fees is observed on September 7th particularly at 20:00 UTC (1pm EST). What is interesting is that several of these the observed spikes in gas fees occur at about 15:00 UTC to 20:00 UTC, which is about 8am EST-1pm EST.

Finally we will take a look at the top 10 causes of burning on the Ethereum network.

Here we see that OpenSea, one of the most popular NFT marketplaces, has been a major contributor to transactions on Ethereum. We see a gradual increase over the course of August in fees burned, and a dramatic increase from August 23rd onwards. OpenSea transaction fees burned seems to have begun to level off from September 7th onward.