NFT Projects Burned Millions Worth of ETH in Past 24 Hours

COVID Punks, Axie Infinity, and OpenSea destroyed more than $9 million

NFT-powered projects like Axie Infinity, COVID Punks, and OpenSea are responsible for the majority of burned ETH in the past 24 hours. Since the implementation of EIP-1559, the Ethereum blockchain has burned more than 4,250 ETH. That’s more than $9 million at the time of writing.

According to data from Ultrasound.Money the COVID Punks project is leading the pack. The NFT project, a copycat of CryptoPunks that has all characters wear face masks, burned more than 527 ETH, or more than $1,2 million. Reportedly the project launched around the implementation of EIP-1559, and many buyers experienced failed transactions.

While the COVID Punks project will probably drop on the leaderboards in the weeks and months to come, projects like OpenSea and Axie Infinity are here to stay. The OpenSea NFT marketplace is a leading platform with more than $568 million in trading volume in the past 30 days. 

At the same time Axie Infinity, despite running on its own Ronin sidechain, is still responsible for lots of activity on Ethereum. The Ronin Bridge transfers NFTs and ERC-20 tokens between Ronin and Ethereum, burning 247 ETH ($610,000) in the process in the past 24 hours. However, the project has seen more than $154 million in NFT trading volume in the past 7 days. That’s a part of the NFT action that happens on Ronin, and not on Ethereum.

Why are they burning ETH

The EIP-1559 proposal launched together with the London hard-fork of the Ethereum blockchain. This means that the change requires the entire community to align and embrace a change. In this case, EIP-1559 introduced a new reward mechanism for miners, which presumably would mean lower rewards. 

However, on every transaction a fee will be burned. At the moment we’re talking about approximately 0.8 ETH ($2,200) per block, approximately every 15 seconds. The burned ETH will reduce the total supply of the cryptocurrency, in result making ETH more valuable. These changes have been made to deflate supply and counter the infinite growing supply of ETH.

In addition, EIP-1559 is an update leading up towards the big change: Ethereum 2.0. In the coming years Ethereum will be transformed from a Proof-of-Work to a Proof-of-Stake blockchain. This would greatly increase the network efficiency and reduce its carbon footprint dramatically.