Ethereum’s network activity is heating up to record levels. And it looks like the work of one NFT player.
On April 5, Ultra Sound Money, an Ethereum network data aggregator, reported that the number of Ether burned within a single block hit record levels twice. Two separate blocks destroyed more than 106 ETH.
Moreover, Ultra Sound Money tweeted that 4,436 ETH burned over an hour, a whopping 73 times the rate that new ETH will be created after the Ethereum network transitions to the Proof of Stake consensus model. That event, expected later this year, is known as The Merge.
The record-breaking blocks have been attributed to a stealthy NFT drop from social media influencer and entrepreneur, Gary Vaynerchuck.
Ethereum’s EIP-1559 upgrade went live in August 2021, introducing a base fee that is burned with every Ethereum transaction.
The burn mechanism has been a source of considerable hype for Ethereum, setting the stage for the network to become deflationary — meaning that more Ether will be burned than created. While several deflationary days have already been posted since the burn rate was introduced, Ethereum’s forthcoming chain-merge with the Eth2 beacon chain is expected to reduce token emissions by 90% and drive consistent deflationary activity on the network.
Vaynerchuck reportedly teased an NFT drop called VaynerSports Pass (VSP) drop to his VeeFriends blog before deleting the post. Primary sales for the VSP NFTs were priced at 0.155 ETH plus gas.
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Tokenholders will receive access to Vaynerchuck’s network of athletes and NFT collectibles, providing access to members-only streams, tickets to live sporting events, and whitelisting for future NFT drops from the influencer. With 15,500 tokens in the collection, Vaynerchuck would have netted close to $10M from the drop.
Screenshots captured at the time of the drop indicate it drove gas prices up to a whopping 4,000 gwei per transaction.
The spike in activity comes after Ethereum’s burn rate was in a steady decline since posting all-time highs in January. While the weekly burn was destroying an average of 12 ETH per minute in mid-January, just 2.5 Ether was being removed from supply every minute as of late March — the lowest level it had ever been since EIP-1559 was implemented.
By contrast, Ultra Sound Money currently estimates an average of 4.3 ETH have been destroyed every minute over the past seven days.