Ethereum Burn Rate Declines as Total Value Locked Drops by 17%

The Ethereum burn rate has hit a new low, with only 121 ETH tokens burned on August 10th after the EIP-1559 upgrade. This decline in burn rate is reflected in the decreasing Ethereum network activity, leading to a drop in dominance in the DeFi market.

While Ethereum still holds a significant share of the DeFi market with a total value locked of $47 billion, rival networks like Tron and Solana have been gaining ground, causing Ethereum’s TVL to decrease by 17% since August 1st. This shift has also resulted in a reduction in daily active addresses, from 731,000 on July 22nd to approximately 386,000 on August 11th.

The decrease in TVL and user activity has impacted transaction volume, resulting in lower gas fees collected and burned. In the last seven days, 3,885 ETH tokens were burned while 18,000 tokens were issued, leading to a net total of 14,206 ETH entering circulation.

Solana, Ethereum’s top rival, has seen a surge in DeFi TVL to $4.72 billion, nearly four times higher than at the beginning of the year. Additionally, Solana has outperformed Ethereum in price growth, with a 487% increase compared to Ethereum’s 39% gain over the past year.

Ethereum’s current price stands at $2,581, reflecting a 13% decline in the last two weeks. However, a positive price action is anticipated as Ethereum’s Funding Rate has shifted from negative to positive, indicating a shift towards a bullish sentiment.

Institutional interest in Ethereum remains strong, with Wall Street giants BlackRock and Fidelity purchasing $761 million and $282 million worth of Ether for their ETH ETFs. Ethereum also experienced the highest inflows last week, amounting to $155 million.

As Ethereum faces challenges in network activity, Solana’s growth and institutional investments in Ether signal a dynamic landscape for the cryptocurrency market. The evolving competition between Ethereum and its rivals underscores the ongoing transformation in the crypto space.