Since its arrival in 2015, Ethereum has become one of the most popular digital assets and blockchains available. Indeed, the network co-founded by Vitalik Buterin has established itself as the second most important cryptocurrency on the market. However, for those new to Ethereum or the industry, there is a lot to learn. In this guide, we will specifically answer what is the Ethereum (ETH) burn address.
Ethereum, like many digital assets, exists within its ecosystem and requires a burn address to remove some of the native tokens from the circulating supply. Different assets may take different approaches to the issue of supply management. Yet despite the differences in approach, this in no way diminishes the overall importance of the process as a whole.
The burn process in Ethereum is a procedure that sees ETH sent to an address to be removed from circulation. This null address is a unique location and leads to the burning of the asset sent there. Additionally, they are unique in that they do not exist in association with anyone and offer an irreversible goal of removing both ETH and ERC-20 from the market.
This development is positive for the ecosystem as a whole, as for all assets. For Bitcoin, for example, this reduces its overall supply through the halving event. This is something that happens every four years and cuts the overall supply of BTC in half.
For Ethereum, burning is how it maintains supply and therefore strengthens the overall value of its price over time. Subsequently, without further ado, let’s explore where Ethereum (ETH) burn addresses are located and some interesting aspects of ETH burning.
Where is the ETH burn address located?
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For the Ethereum blockchain, the Ethereum (ETH) burn address is specifically designated as 0x000000000000000000000000000000000000000 and this is where ETH and other Etheruem-based tokens are sent for permanent deletion. The process is called “burning” and is taken up by a multitude of different assets currently on the market.
What is also important about burning ETH is that the address does not have a private key. This means that any tokens sent to this address are unrecoverable. There is no way to access them, nor transfer them again to different wallets. Therefore, completing a transaction at the burn address is the decimation of the ETH or ERC-20 tokens you sent.
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According to Etherscan, the previously mentioned null address currently holds over 13,300 ETH. Additionally, these tokens are worth over $34 million since the null address was active. This indicates that a rather remarkable portion of ETH has been sent to the burn address since its debut in 2015. Subsequently, the overall value of the tokens has seen an immense increase.
Although the process of burning ETH has been around since the beginning, 2021 saw a new development in the ETH ecosystem come to fruition. This led to a massive change in the amount of ETH burned thanks to a change in the functionality of Ethereum as a network.
What is EIP-1559?
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Specifically, this change took place through the implementation of Ethereum Improvement Proposal (EIP) 1559. This proposal first came to fruition in 2021 and gave rise to a new mechanism that would facilitate the burning of ETH.
Every transaction made on the Ethereum blockchain requires payment of gas fees. This is a number developed through an algorithm that extracts data from network activity and volume. The EIP-1559 takes these base charges and sends them to the null address for burning.
This integration achieves a few key elements that should benefit the Ethereum ecosystem over time. First, it will allow for greater predictability of Ethereum fees. It is therefore a question of reducing the amount of fees in the past. Second, this proposal will strengthen the asset’s deflationary infrastructure. Therefore, this helps ensure the value that the asset retains over time.