Nearly 10,000 Ether tokens worth $18,144,474 based on the current Ethereum value of $1,848.84 per token were burned on Monday, removing them from circulation, according to reports. Ethereum burns tokens through a process that sends them to an unusable wallet.
The burn took place as part of an Ethereum upgrade known as EIP-1159, which changed the fee model for transactions drastically. Transactions now have a variable base fee, which adjusts according to the current demand for block space. This base fee is burned, resulting in a decrease in Ether’s supply.
As Ethereum currently issues new Ether at a rate of 4% annually, it is expected to decrease substantially once the Ethereum 2.0 upgrade occurs. This could make ETH a deflationary currency, as its burn rate could eventually surpass its issuance.
As of yesterday, the net issuance rate for Ether was -16%, according to data from Glassnode.