More than $1 billion worth of ether has been burned since Ethereum's London upgrade

Since the introduction of Ethereum's London upgrade on August 5, more than 297,000 ETH has been burned — worth just over $1 billion — according to The Block's Data Dashboard.

The upgrade added a new burning mechanism to transaction fees with the goal of making them easier to price. To make a transaction, you now pay a base fee, which gets burned, and a priority fee that's effectively a tip to the miner. (For a detailed explanation of how fees now work, see here.)

As a result, Ethereum's inflation rate has been decreasing. Miners on the network produce about 13,000 ETH each day (given to them as mining rewards) but the burning mechanism is starting to counter that. Some days, the amount of ETH burned has overtaken the amount produced. Currently the net emission is around 6,800 ETH.

Part of the reason why so much ETH is being burned is the prevalence of high transaction fees on the network, due to consistent demand — along with moments of high demand as we are in NFT minting season. The number of Ethereum transactions has remained high at 1.2 million transactions per day.

Although, with second-layer solutions like Arbitrum starting to take off, it's possible this could free up some room on the main blockchain — unless it just adds to the activity.