What happened: On Sunday a total of 4,972.95 Ether (CRYPTO: ETH) worth $8,354,560, based on the current value of Ethereum at time of publication ($1,680.00), was burned from Ethereum transactions. Burning is when a coin or token is sent to an unusable wallet to remove it from circulation.

Why it matters: On August 5th, 2021, the Ethereum blockchain implemented an important upgrade known as EIP-1159. This Ethereum improvement proposal changed the fee model drastically. Now each transaction includes a variable base fee that adjusts according to the current demand for block space. This base fee is burned, or permanently removed from circulation, lowering the supply of Ether forever.

See Also: How to Buy Ethereum & When Will Ethereum 2.0 Launch

Ethereum is currently issuing new Ether at a rate of 4% per year, although this is expected to decrease to around 0.5-1% as a part of the Ethereum 2.0 upgrade. Once this occurs, many speculate that the burn rate of Ether will be greater than the token’s issuance, causing ETH to become a deflationary currency.

The net annualized issuance rate for Ether yesterday was -6.43%.

Data provided by Glassnode