NFT Market Flips DeFi for Ethereum Usage and Fee Burning

Non-fungible tokens (NFT) are now the most popular thing on the Ethereum network, and gas fees are surging again as a result.

Decentralized exchange Uniswap is no longer on top when it comes to Ethereum usage. That accolade has now been taken by the OpenSea NFT marketplace amid a flurry of new NFT airdrops and rock fever.

OpenSea NFT market gassed up

According to Etherscan’s Gas Tracker, OpenSea is now the largest generator of transaction fees on Ethereum. Over the past 24 hours, the NFT portal has used 15.46% of the total gas expenditure on the network. This equates to roughly 900 ETH or $2.8 million in transaction fees at current prices.

Uniswap had been the clear leader in Ethereum usage for most of this year but it (version 2) has now fallen to the second spot with 8% of the total gas, or 477 ETH worth around $1.5 million. Even adding Uniswap v3 to those figures doesn’t come close to what OpenSea is chewing through in terms of network fees.

In third place was another NFT platform for the game Axie Infinity which has generated 270 ETH, or $860 million in Ethereum transaction fees over the past 24 hours.

All of that gas consumption has put OpenSea on the top of the fee burning chart as well, according to the gas burn tracker ultrasound.money. Transactions on OpenSea have resulted in 1,240 ETH being burnt over the past 24 hours at the time of writing. This is around $3.9 million at current prices. Naturally, there will be some discrepancies in the way the two stats providers make their calculations.

Gala Games’ Vox NFT collection is burning the second-largest amount of gas with 665 ETH, or $2.1 million over the past 24 hours.

Fee burning goes deflationary, gas soars

At the time of press, the ultrasound.money burning tracker was reporting a total of 25,900 ETH burnt less than a week after the London upgrade was deployed. At current prices, this is a whopping $82 million.

These massive spikes in gas and ETH burning have created a deflationary effect on some blocks. When the amount of ETH burned is greater than the mining reward, deflationary blocks are produced and the supply temporarily decreases.

This was observed by the ETH Burn Bot a few hours ago when 945 tokens were destroyed within an hour resulting in a net issuance change of -417 ETH and an annualized inflation rate of -3.12% (deflation).

It is not all good news for Ethereum users, however, as gas fees have spiked to an average of $20 again. They are even higher, approaching $30 on average, for token swaps and smart contract operations.