The popularity of the PEPE meme currency has resulted in a high burn rate on the Ethereum (ETH) network. Following the popularity of meme currency, others have tried to imitate it. More coins are being launched, their volume is growing, and the Ethereum network’s new proof algorithm has been pushed into overdrive regarding burn fees.
Meme currency has become well known in the crypto world over the last month, and the increase in volume has unwittingly contributed to the increase in the rate of ETH burning. To put this in context, statistics from Ultrasound Money, a website dedicated to Ethereum post-Merger activity, shows that a total of 561,656 ETH has been burned since the Merger 231 days ago.
Scaling down to a shorter time frame of 30 days reveals that around 130,852 ETH was destroyed in one month. This shows that around 23% of the total ETH burned so far has been burned in the past month, driven by increased network activity.
In general, the more activity on the Ethereum network, the higher the bid for block space. This increases fuel costs as customers rush to have their transactions validated as soon as possible. The more ETH consumed, the higher the bid for block space. Repeat as needed.
The biggest burn is on Uniswap, the largest decentralized exchange on the network. According to Ultrasound Money, transactions on DEX have burned around 32,800 ETH in the previous 30 days.
This increased burn rate has not abated, with over 45,000 ETH burned in the previous seven days. As a result, the current burn rate is 4.53 ETH per minute, with a 3.47x issuance offset rate.
Even in 2021, Ethereum always leads the meme coin trend. This time is no exception, as the network currently controls the majority of meme currency volume. As a result, 24-hour traffic on the network has increased to $1.12 billion.
Due to its scale, Ethereum is also the preferred network for many new projects, with PEPE, WOJAK, and TURBO debuting in the previous month. The currency alone generates nearly $3 billion in trading activity and is still growing. If the current trend continues and gas prices remain high, ETH cost burning is likely to increase. This implies that more ETH will be removed from circulation, which will be very positive for the price of ETH going forward.